Red Hat and Telenor announced a partnership to build a sovereign AI factory at Mobile World Congress 2026.

At MWC 2026 in Barcelona, Telenor and Red Hat unveiled a collaboration to build a Norway-based AI factory offering high-performance AI compute while keeping data within Norwegian borders. Telenor is using Red Hat OpenShift AI as its primary environment for building, training, and running AI agents and applications, including RAG and agentic workflows with LlamaStack, paired with Red Hat OpenShift Platform Plus as the cloud-native base layer. The AI factory is designed to provide high-performance compute for AI models while enabling companies to meet EU data sovereignty rules without sacrificing speed or capacity. As Rich Stephens, Red Hat's vice president for EMEA Telecommunications, stated: "With the pace of change in the AI market, Red Hat and Telenor AI Factory are catering for today's greatest strategic need: The freedom to choose any model, on any accelerator, across any environment."

Telenor's AI Factory runs on infrastructure located in Norway, including Skygard's existing and planned data centers in Oslo, with all customer data stored and processed entirely within Norway's borders to comply with strict Norway and EEA regulatory requirements. The facility currently deploys Nvidia H100 GPUs in DGX H100 systems to deliver high-performance networking, scalable into larger clusters, with Skygard's cluster in Oslo capable of supporting up to 40 MW when complete. Kaaren Hilsen, CEO of Telenor AI Factory, emphasized that the companies are "transforming isolated GPU silos into a flexible and compliant offering ready for the demands of the Nordic and wider European markets." The Red Hat integration aims to unite data scientists, AI engineers and application developers under one platform, promoting collaboration, operational consistency and production scalability.

This partnership reflects Europe's deliberate attempt to define an AI infrastructure model that competes on governance rather than scale alone. By combining sovereign Norwegian data centers with Red Hat's open, Kubernetes-native stack, Telenor positions its AI Factory as an alternative to AI regions dominated by hyperscalers. OpenShift's portability—enabling enterprises to build once and move workloads across environments with minimal re-engineering—addresses a key concern for Nordic governments and regulated industries navigating GDPR and the EU AI Act. Hilsen noted the factory was built "for flexibility and portability, no lock-in, and Red Hat is a key part of this with its open software and principals."

The move grants Telenor a credible monetization path beyond connectivity, transforming sovereign data center assets into higher-margin AI services in an increasingly commoditized GPU cluster market. If successful, the model could offer European telcos a blueprint for leveraging fiber backbones, data center assets, existing enterprise customer relationships, and decades of regulatory expertise to become major players in AI infrastructure. The ultimate test, however, remains whether sovereign AI platforms can scale fast enough to compete with hyperscalers.