Germany is laying the groundwork for a state-backed partnership with Nvidia (NASDAQ: NVDA) and about 12 other indigenous AI labs to fund “physical AI” for use by robots and autonomous vehicles.
The government is looking to provide funding to the tune of hundreds of millions of euros, per Handelsblatt.
Two goals: train robots, train industrial models
The idea is divided into two main categories. One is to set plans in place for physical AI, which is the computing used by AI labs to train robots and self-driving vehicles. The second is to build industrial AI models with the strength and capacity to compete with its international counterparts.
Based on reports, the money is meant to cover expenses for compute and model training.
Nvidia is the go-to for work of this nature. The company has chips and matched software that train the majority of today’s AI systems. Frontier models like Anthropic and OpenAI both run on Nvidia hardware.
12 firms and a reception in Berlin
About a dozen German companies are set to partake in this partnership. Companies like Siemens, Audi and Black Forest Labs have a front-row seat. Nvidia’s contribution includes assigning engineers who will play a part in the project.
Berlin is reportedly planning the unveiling for next week during its “Invest in Germany” summit. CEO of Nvidia, Jensen Huang, is set to arrive in Berlin on October 19 for a reception by Chancellor Friedrich Merz at Kraftwerk Berlin.
A private meeting will take place, after which a joint meeting with Mercedes CEO Ola Källenius will be held.
Built on top of the Telekom cloud deal
The partnership builds on existing projects. It takes the Soofi project to the next level. Soofi is an abbreviation for Sovereign Open Source Foundation Models, a consortium of universities, research bodies and AI firms, and it was created in September 2025.
The Federal Ministry for Economic Affairs and Energy invested €20 million into Soofi, which was used to train its first model on Deutsche Telekom’s Industrial AI Cloud.
Telekom’s industrial AI cloud is itself an Nvidia project. Deutsche Telekom and Nvidia put pen to paper on a €1 billion deal, announced on November 4, 2025. The deal or partnership covers the operation of the Munich facility, which is to become the world’s first industrial AI cloud.
The AI cloud is built around ~10,000 Nvidia Blackwell GPUs and is set to increase Germany’s AI computing capacity by approximately 50%. The facility would make use of over 1,000 Nvidia DGX B200 systems and deliver 0.5 exaflops of compute, to be used across robotics simulation and digital twins.
One stop on a European tour
Germany is just one part of a larger picture. Jensen Huang, CEO of Nvidia, has spent the better part of this week traveling through Europe’s largest economies. He met with French President Emmanuel Macron in Paris on Tuesday after backing four French startups, while sinking an extra $2 billion in European AI, after spending $8 billion earlier.
The success of the partnership largely depends on the terms of the agreement. The amount of funds pledged, the scope of the partnership, and the agencies that sign onto the agreement will play a key role in determining whether or not this was a success.
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