Good news in gloomy times: While the EU Commission in Brussels trimmed the economic forecast for Germany on Thursday, The US company Microsoft announces good news 650 kilometers further east, in Berlin. Brad Smith, the president of the software and technology company, announced after a meeting with Chancellor Olaf Scholz that Microsoft would invest more than 3.2 billion euros in data centers in the greater Frankfurt am Main area and especially in North Rhine-Westphalia by the end of 2025. This is the company’s largest investment in Germany to date. And there are no subsidies, emphasizes the American.
The data centers offer cloud computing – customers do not run software on their office computers, but on Microsoft computers to which they are connected via the Internet. The investments are also intended to expand the range of applications using artificial intelligence (AI). “We want to enable the German economy to benefit from AI,” says manager Smith. The company works with, among others, the AI developer Open AI, the company behind the popular website Chat-GPT.
Microsoft currently has more than 3,000 employees in Germany. Company President Smith says the investments will directly create few jobs. But the customers of the data centers benefited from their higher performance, which could lead to further job creation in the companies.
In North Rhine-Westphalia, Microsoft will build new data centers in the cities of Bedburg and Bergheim, west of Cologne. There is also a third location that is yet to be announced. The two communities belong to the brown coal region Rheinisches Revier. The open-cast mining and coal-fired power plants are expected to end there by 2030. There is therefore an urgent need to replace the jobs that will be lost. Prime Minister Hendrik Wüst (CDU) calls Microsoft’s decision a “great contribution to structural change in the Rhenish region”. His party colleague Volker Mießeler, the mayor of Bergheim, told WDR that he hoped for “a pull effect” from the data center; additional companies could relocate to benefit from the proximity to the facility.
The chemical industry is suffering greatly
In fact, the proximity of Bergheim and Bedburg to cities such as Cologne, Bonn, Düsseldorf and Leverkusen may have played a role in Microsoft’s choice of location. Many large corporations are based there, such as Bayer and Lanxess, Deutsche Telekom and DHL, Henkel and Vodafone Germany, and the short distance to the data center speeds up data transfer.
North Rhine-Westphalia can use good news right now, because the economy in Germany’s most populous federal state is booming especially deep in crisis. An important reason is the great importance of the energy-intensive chemical industry – its share of economic output in North Rhine-Westphalia is three times larger than the national average. Companies such as the plastics producer Covestro or the specialty chemicals group Lanxess are suffering greatly from the increase in gas and electricity costs in recent years. But the Westphalian household appliance manufacturer Miele also recently announced that it would cut jobs and relocate production abroad.