Schwarz Group, the owner of Lidl and Kaufland, is building a €11 billion AI data center in Lübbenau, Germany, without a disclosed government subsidy, creating one of Europe’s largest privately financed computing projects. The planned 200-megawatt campus, designed to accommodate as many as 100,000 graphics processors, matters because it shifts part of Europe’s AI infrastructure drive from government programs to an industrial group’s balance sheet.

Schwarz Digits, the group’s technology division, broke ground on the 13-hectare Brandenburg site in 2025. The campus occupies land formerly used by a coal-fired power plant and is planned as six buildings developed in phases. About €2.5 billion of the commitment covers construction, while the remaining €8.5 billion is expected to fund technology, maintenance and periodic hardware replacement through at least 2045, according to project reporting.

The first three modules are scheduled for completion by the end of 2027. Schwarz Digits says the full campus could provide 200 megawatts of connected capacity and eventually host up to 100,000 GPUs. Those figures describe the site’s planned maximum; the company has not publicly identified the GPU suppliers, deployment schedule or initial installed quantity.

The commitment is about five times the digital division’s latest annual revenue. Schwarz Group reported that its IT and digital business generated €2.2 billion in its 2025 fiscal year, up from €1.9 billion, while the wider group recorded €185.6 billion in revenue and employed 604,000 people. The parent company’s retail cash flow gives Schwarz Digits financial backing that most European cloud or AI start-ups do not possess.

Private Capital Reshapes AI Capacity

The Lübbenau project offers a sharp contrast with Intel’s planned Magdeburg semiconductor factories. Germany had promised about €9.9 billion in state support for that separate €30 billion project, but Intel canceled its German plans in July 2025 while cutting costs. Lübbenau is a data center rather than a chip factory, so the projects are not direct substitutes, but their outcomes illustrate the limits of subsidy agreements when the recipient’s global strategy changes.

Schwarz Group’s private, foundation-linked ownership may support a longer investment horizon because management does not face quarterly pressure from public shareholders. That connection is an interpretation of the financing model, not proof that privately controlled projects will outperform publicly supported ones. If Lübbenau attracts outside customers, it could expand European-operated cloud and AI capacity for governments and regulated industries. If demand remains largely internal, the investment may amount to an expensive corporate infrastructure program rather than a broader European platform.

From Retail Scale to Cloud

Schwarz Digits was established as a distinct division in 2023, combining services including the STACKIT cloud platform and cybersecurity company XM Cyber. STACKIT had already spent years building German-based cloud infrastructure before the Lübbenau commitment, giving the group an operating base that companies entering the market from scratch would lack.

The technology division also inherits experience from a retailer handling billions of annual transactions across 32 countries. Its services carry certifications and controls used in regulated environments, including BSI C5, ISO 27001 and SOC 2. Those credentials can support sales to public bodies and companies concerned about data residency, although certification alone does not establish commercial competitiveness.

Schwarz Group also committed €500 million to Cohere alongside Cohere’s announced combination with German AI company Aleph Alpha in April 2026. The companies said the deal would combine models, applications and infrastructure for customers seeking greater control over their AI systems. The merger remains subject to regulatory approval, and several commercial terms have not been publicly confirmed.

“For us, Lübbenau is more than just a data center location; it is a central anchor point for Europe’s digital sovereignty.”

— Rolf Schumann, co-chief executive of Schwarz Digits

Demand, Disclosure and Dependency Risks

It is not yet clear how quickly Schwarz Digits can fill the campus with paying external customers or whether the planned maximum of 100,000 GPUs will be reached. Electricity sourcing, operating costs, hardware vendors and the timing of later modules also remain only partly disclosed. The €11 billion figure covers spending over many years rather than an immediate hardware purchase.

European ownership does not remove dependence on foreign chipmakers, software providers or energy markets. The source material also reports a five-year STACKIT exclusivity arrangement connected to the Cohere-Aleph Alpha deal, but full contractual terms have not been published. Private ownership can support patient investment while providing less public disclosure, leaving questions about pricing, governance, succession and customer access.

First Capacity Due in 2027

The next measurable milestone is completion of the first three Lübbenau modules, planned for the end of 2027. Permitting, power connections, equipment orders and customer announcements will show whether the construction timetable and initial capacity remain on course.

Regulators must also review the Cohere-Aleph Alpha combination. After that process, attention will turn to whether the merged company uses Lübbenau and STACKIT at scale. The stronger test of Schwarz Group’s strategy will be external adoption, not the campus’s stated maximum capacity.

Key Questions

What is Schwarz Group building in Lübbenau?

Schwarz Digits is developing a 200-megawatt data center campus on a former coal-power site in Brandenburg. At full build-out, the company says it could accommodate up to 100,000 GPUs for cloud and AI workloads.

Is the project receiving government funding?

The project is proceeding with no disclosed direct government subsidy, according to the source material and published project reporting. Public authorities still play roles in permitting, energy infrastructure and local planning.

How does Lübbenau compare with Intel’s Magdeburg plan?

Lübbenau is an AI and cloud data center, while Magdeburg was planned as a semiconductor manufacturing complex. The comparison concerns financing and execution: Schwarz is funding its project privately, while Intel canceled its plan after Germany had promised €9.9 billion in aid.

Will the campus make Europe technologically independent?

No. It could increase European-controlled computing capacity, but it will still rely on hardware, software and supply chains that may include non-European companies. It represents a change in infrastructure ownership, not full independence.

What are the main financial risks?

The main open issue is whether external customer demand can support spending far above Schwarz Digits’ current annual revenue. Reported revenue and investment figures are historical or planned amounts, not guarantees of future performance. This article is not financial, tax or legal advice.

Source: Thorsten Meyer AI