Jensen Huang Urges Germany to Accelerate AI Adoption in New Industrial Pact

Nvidia CEO Jensen Huang and German Chancellor Friedrich Merz unveiled a wide-ranging artificial intelligence partnership on October 19, 2026, aimed at modernizing the country’s manufacturing sector. Speaking at the “Invest in Germany” summit in Berlin, Huang warned that Germany currently lags in the global AI race and urged the nation’s industrial leaders to move quickly to “re-engineer” the country’s business model through the adoption of generative and physical AI.

The agreement, formalized through a Joint Declaration of Intent, involves a consortium of 12 major German entities, including Siemens, Audi, and the AI startup Black Forest Labs. To support the initiative, the German government is allocating funding in the “three-digit millions” of euros, primarily to secure the massive computing power required to train specialized industrial models.

Deutsche Telekom’s Industrial AI Cloud will utilize 10,000 GPUs to power the new initiative.

The central pillar of the partnership is “Physical AI”—Nvidia’s term for AI systems that interact with the physical world through robotics, autonomous vehicles, and automated factory floors. Huang told summit attendees that while Germany missed the first wave of consumer software AI, its deep roots in engineering provide a unique advantage in this new phase. He characterized the shift as a move from digital services to the digitization of heavy industry, noting that “electrons will never replace atoms” in the context of Germany’s manufacturing-heavy economy.

Technical infrastructure for the pact will be anchored by Deutsche Telekom’s new Industrial AI Cloud. This specialized facility will utilize Nvidia Blackwell GPUs to provide the high-performance computing necessary for the “SOOFI” project (Sovereign Open Source Foundation Models). These models are intended to serve as a shared, open-source technical backbone for German companies, allowing them to build proprietary applications on top of a secure, locally hosted foundation.

Chancellor Friedrich Merz used the summit to issue a direct plea to the German “Mittelstand”—the small and medium-sized enterprises that form the country’s economic core—to open their industrial data for AI training. Merz argued that sovereign models are only effective if they are fed by the specific, high-quality data generated within German factories.

During a public exchange with the Chancellor, Huang also addressed the European regulatory environment. He suggested that “regulation depends on industry growth,” advising that Germany must prioritize building a robust AI industry before implementing restrictive frameworks. Huang argued that the speed of adoption would determine whether Germany maintains its status as a global industrial leader or becomes a “museum” of past engineering excellence.

For startups like Black Forest Labs, the agreement provides access to enterprise-grade compute resources that were previously difficult to secure within the European Union, potentially reducing the flight of AI talent to Silicon Valley.

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