Höttges' biggest bet: Deutsche Telekom moves into the AI data-centre business

Deutsche Telekom wants to become the operator of its own AI server farms. A project with Nvidia is meant to be just the beginning. What is driving CEO Höttges – and what is at stake.

For Deutsche Telekom CEO Timotheus Höttges, data centres are the biggest bet outside his core business. He is the executive who refocused the DAX-listed company on its network rollout. “Stick to your knitting” was his line in public, and he ruled out ambitions outside mobile and fixed-line networks. Under him, Deutsche Telekom stopped expanding what was once a much larger compute business.

That is now changing. The Nvidia partnership is only the start, Höttges said in August. In the next step, Deutsche Telekom plans to build AI gigafactories with EU support. There is already a partnership with the German state of North Rhine-Westphalia. Talks are running with energy company RWE.

Canadian financial investor Brookfield is lined up as a backer. “This partner is very engaged and very interested in building this gigafactory together with us,” Höttges said. Brookfield had previously supported the spin-off of Deutsche Telekom’s tower business.

It remains open how investors will react to the CEO’s new ambitions. Analyst James Ratzer of New Street Research warned that telecoms investors watch current numbers very closely. “The message to investors has to be clear: who are the end customers, what is the revenue, and how is this financed,” Ratzer demanded. Otherwise the share price could take a serious hit.

I wrote the full story for Handelsblatt. This is a first impression.