Although the USA and China are the current artificial intelligence (AI) superpowers, Germany actually employs 14% of all AI workers in Europe, second only to the UK, which employs 24% of them. There are over 900 AI startups in Germany at the time of writing, up from 687 in 2024. The main clusters are in Munich and Berlin, accounting for over half of these. The federal government has identified AI as one of six key technologies in Germany’s industrial priorities, in its 2025 High Tech Agenda. There is a €5.5 billion government investment in AI, specifically for next-generation artificial intelligence models, increased computing capacity and data infrastructure with a focus on industrial applications. Germany does not have the level of venture capital investment that the US does, but Berlin is ranked 30th in terms of VC investment by city globally. It should be noted, though, that eight Chinese cities attract more VC investment than Berlin, to give a sense of scale.
German specialist AI companies include DeepL in Cologne, valued at $2 billion, a specialist in language translation software based on neural networks. DeepL achieved revenues of $185 million in 2024 and has nearly 1,500 employees, so is much more than a “PowerPoint and a prayer” AI startup. Helsing in Munich specialises in the defence analytics sector and is valued at $5.4 billion, with $37 million revenue in 2023.
Quantum Systems in Bavaria is another German AI company with a $1 billion valuation and $124 million revenue in 2024, focused on robotics and drones. Parloa in Berlin is another company with a $1 billion valuation, focusing on enterprise customer service agents. Other German technology companies with significant AI expertise include Celonis, a $13 billion valuation company with a focus on enterprise AI, and Personia, with a focus in human resources technology.
The behemoth German software company is SAP, with $37 billion revenue and 110,000 employees. SAP has a suite of AI agents branded as Joule, a family of tools aimed at specific tasks such as invoice matching, supplier onboarding, and expense auditing. It has also embedded AI functionality into its core ERP applications, enabling four hundred AI specific features across its vast application suite.
Nvidia, the company that builds most of the GPU chips that power most AI applications, has significant investment in Germany. It is building the first industrial AI cloud for European manufacturers, based on ten thousand of its chips. There is also the Jülich Supercomputing Centre, which hosts JUPITER in northern Rhine Westphalia. This is a supercomputer that will be Europe’s first exascale system, featuring about 24,000 Nvidia chips. It is one of the most powerful supercomputers in the world.
Germany has a large automotive sector, and is driving forward with autonomous vehicles. AI is used by companies such as BMW and Porsche for autonomous driving research, supply chain optimisation, and vehicle customisation, as well as AI-powered navigation and driver-assist systems.
Germany has long had a strong reputation for engineering excellence, and so it is no surprise to see its industrial companies taking advantage of AI in areas like driverless cars and robotics. Other than SAP, it has traditionally not been so strong at building large standalone software companies. However, there is now a string of German AI companies with billion-dollar valuations, so there is potential for this to change. Germany still lacks the deep-pocketed venture capital investment that heavily funds companies in USA and China, but it is pressing ahead despite this. Its government is also supporting the AI push, and it’s putting its money where its mouth is, with billions of euros of AI investment. AI adoption in Germany is strong in healthcare, manufacturing and logistics, with over 70% of German companies planning to invest in AI in the next year. There is an emphasis in Germany on applying AI to industrial processes, which distinguishes it from other countries. Fully 90% of German AI startups focus on B2B rather than B2C markets, so they concentrate on corporate customers rather than consumers. Time will tell whether these factors will enable Germany to compete effectively with the titans of AI in the USA and China. Success will hinge on more late-stage funding, international expansion, and scaling Germany’s distinctive AI sector.
