Schwarz Group Announces EUR11 Billion Investment in AI Data Center in Lübbenau

The Schwarz Group, parent company of Lidl and Kaufland, has unveiled plans to construct a new artificial intelligence-focused data center in Lübbenau, located in the Spreewald region. This project represents the largest single investment in the company's history, with a total budget of EUR11 billion.

The first phase of the Schwarz Digits Datacenter is scheduled for completion by the end of 2027. According to company statements, the facility will operate using renewable energy sources and is designed to be modular, allowing for future expansion. The initial setup will support a connection capacity of approximately 200 megawatts. Once fully operational, the data center will be capable of accommodating up to 100,000 specialized AI chips (GPUs), positioning it among the most powerful infrastructure projects of its kind in Europe. For context, a comparable data center under development by Deutsche Telekom and Nvidia in Munich is planned to house 10,000 GPUs.

The Lübbenau data center will be tasked with managing and processing extensive datasets, including those required for training and deploying advanced AI models. These models will be employed for various applications, such as processing supply chain information, transaction data, and customer engagement metrics. Additionally, the computing resources will be made available to external clients, expanding the Schwarz Group's digital service offerings beyond its internal operations.

In an effort to enhance energy efficiency and sustainability, the facility is set to channel waste heat from its computing processes into the local district heating network. This approach aims to supply surplus energy to residential and commercial customers in Lübbenau and surrounding areas, contributing to the region's energy transition efforts.

The choice of Lübbenau as the site for the new data center was influenced by several factors, including the availability of robust electrical infrastructure that previously supported a decommissioned lignite power plant. This infrastructure ensures a reliable power supply for the energy-intensive operations of the data center. The location also benefits from existing high-capacity fiber optic networks, with a major distribution hub operated by Deutsche Telekom in the vicinity, ensuring high-speed data connectivity.

Germany's Digital Minister has emphasized the strategic importance of expanding the nation's data center capacity to maintain competitiveness in artificial intelligence and digital innovation. Strong digital infrastructure is regarded as foundational for supporting economic activities, public administration, and daily life, according to industry stakeholders. Germany currently leads Europe in data center capacity, with a total of approximately 2.4 gigawatts, although it remains behind the United States and China, which have significantly larger infrastructures.

The Schwarz Group's strategy mirrors approaches taken by global technology leaders, notably Amazon, which leveraged its own data centers to create a dominant cloud services business. By making its resources available to third parties, the Schwarz Group aims to diversify its portfolio and become a significant player in the European cloud and AI infrastructure market.

With approximately 14,200 retail locations in 32 countries and a workforce of around 595,000 employees, the Schwarz Group is one of the largest retailers in Europe. The new Lübbenau data center is expected to play a crucial role in supporting the company's ongoing digital transformation and expanding its technological capabilities for the future.