Schwarz Group has committed €5.6 billion to construct a new data center campus near Rostock, Germany.
The Schwarz Group, parent company of retail chains Lidl and Kaufland, will invest €5.6 billion by 2033 in a new hyperscale data center in Dummerstorf near Rostock. Announced Thursday alongside Mecklenburg-Vorpommern Minister-President Manuela Schwesig, the facility will initially feature a 240-megawatt grid connection—comparable to the power consumption of a major German city—with room to expand to one gigawatt by 2045 based on utilization.
The project marks the Neckarsulm-based conglomerate’s push into the hyperscaler market, positioning itself as a European alternative to U.S. cloud giants Amazon Web Services (AWS) and Microsoft Azure. “Digital sovereignty is not created through appeals or speeches. It is created through action, through reliable infrastructure, and through practical applications,” said Schwarz Group CEO Gerd Chrzanowski. He stressed that the development and operation of cloud and AI solutions must remain viable under German law.
The location was chosen primarily for its abundant wind-generated electricity. Mecklenburg-Vorpommern already generates over half of its electricity from wind power and produces a significant surplus. Transmission operator 50 Hertz has guaranteed a connection to the 380-kilovolt ultra-high-voltage grid, enabling construction to begin as early as next year—a stark contrast to regions like Greater Frankfurt, where operators sometimes face decade-long waits. Bernie Wagner, sales chief at Schwarz Digits KG, noted the structural advantage: “We have fumbled in Germany with the expansion of energy transmission lines. Now it is easier to bring data south via fiber optics than to wait until power lines are built there.” The facility will also integrate with Rostock’s municipal utilities, feeding waste heat into the city’s district heating network under a signed letter of intent. Server cooling will utilize a closed-loop system requiring minimal water.
For Minister-President Schwesig, whose re-election campaign faces stiff competition from AfD candidate Leif-Erik Holm, the announcement arrives ahead of September’s state elections. She highlighted the investment’s benefits for the structurally weaker region, including construction-phase contracts, 120 permanent jobs, enhanced cybersecurity, and potential downward pressure on electricity prices. The data center will also help mitigate large-scale wind turbine curtailments caused by limited transmission capacity during periods of low demand. Schwesig urged energy producers to pass on low generation prices of approximately five cents per kilowatt-hour to local businesses and consumers, while ensuring municipalities and citizens in wind-heavy areas share in the profits.
The Schwarz Group reported total revenue of €185.6 billion and employs over 600,000 people globally. Its IT division, Schwarz Digits, generated €2.2 billion in revenue for the fiscal year ending in late February, a 16 percent increase driven by rising cloud demand. Highlighting internal workload, Chrzanowski noted, “Every night, two billion AI decisions are made at our company.”
Schwarz currently operates seven data centers, with another under construction in Lübbenau, Brandenburg (€11 billion investment), a third planned in Hamburg within an existing property, and three additional facilities for the Benelux region being developed jointly with Dutch telecommunications company KPM. The group follows an “onion principle”: capacities are first allocated internally before expanding to external customers via the Stackit cloud platform and third-party IT solutions. While U.S. hyperscalers routinely operate at gigawatt scales—Meta’s Louisiana facility alone is projected to reach five gigawatts—the total grid connection capacity for all German data centers stood at just 2,980 megawatts last year, according to industry association Bitkom. Schwarz Digits’ path has faced hurdles, including the sale of initial subsidiaries, failed negotiations with major German corporations, and the departure of former key executive Rolf Schumann. Current CEO Christian Müller is now concentrating on scaling the Stackit cloud business and forging partnerships with U.S. providers.
Beyond infrastructure, Schwarz aims to accelerate public administration digitalization in partnership with the state. Later this year, Mecklenburg-Vorpommern’s digital building permit system will launch on the Stackit platform. The state will also adopt Open Desk, an open-source alternative to Microsoft Office distributed by the federally owned Center for Digital Sovereignty in Bochum, with schools designated as the first sector to transition.
The Dummerstorf project aligns with broader industrial investments in northeastern Germany. In early summer, 50 Hertz awarded its first converter platform contract to a consortium of Neptun Werft and Belgian technology group Smulders, generating €2.5 billion in expected orders. Meanwhile, Kiel-based submarine specialist TKMS is expanding its Wismar shipyard, creating up to 1,500 new positions. “The state government’s goal is for us to become more independent of foreign providers of data centers and cloud and AI applications. We therefore see the Schwarz Group’s investment decision as an opportunity for greater independence and greater data security,” Schwesig stated. Whether the investment ultimately demonstrates that renewable energy can successfully attract heavy industry remains uncertain, given ongoing debates over wind turbine siting and lingering public skepticism toward artificial intelligence.