Siemens invests €300 million in German plants to tackle AI data‑center power bottleneck

Siemens announced a €300 million investment to expand two existing factories in Frankfurt and build a new supply plant in Offenbach. The project will create 700 jobs in manufacturing, logistics and administration and aims to boost production of medium‑voltage switchgear and transformers needed for AI data‑center racks that can draw up to 200 kW each. The move responds to a growing power‑distribution shortage that is becoming the main constraint on building new AI compute facilities, especially after the EU bans the climate‑gas SF6 in new switchgear from 2026.

At the same time, Germany’s financial‑market regulator BIZ warned that the AI sector faces overcapacity and rising debt as the world’s largest hyperscalers plan to spend more than $1 trillion on AI infrastructure in 2025‑26. The regulator highlighted risks from power supply, advanced semiconductor and network‑equipment shortages, which could outpace corporate cash flows and raise credit‑risk premiums. The combined financial and technical pressures could spill over into broader inflation dynamics.