US technology giant Microsoft has pledged $3.44bn in investments in Germany in the next two years, the company’s vice-chairman Brad Smith said, cited by Reuters.

The investment will help Microsoft double the capacity of its AI and data centres in Germany, as well as expand its training programmes.

“We are doing this because of the enormous confidence we have in Germany,” Smith said.

Marianne Janik, CEO of Microsoft Germany, declined to comment on where investments would be made but said the company was considering the western Rhineland region or around Frankfurt as an option.

Microsoft has been on the lookout to boost its AI infrastructure, with the company announcing major investments last year, including a $3.2bn (£2.5bn) promise to scale up its UK operations, as well as $3.2bn (A$5bn) to expand Australia’s hyper-scale computing and AI set-up.

The latest investment round in Germany follows a strong year for the US giant. In 2023, Microsoft reported $211bn in revenue and more than $88bn in operating income on the back of massive investments in the AI sector. As of December 2023, the company has committed up to $13bn to OpenAI, according to people familiar with the matter and cited by the Financial Times.

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OpenAI is an AI research organisation owned by Sam Altman and is behind the language learning model ChatGPT.

The investment in Germany comes as a relief for its slowing economy, which contracted by 0.3% in 2023. Despite this, the country remains Europe’s top foreign direct investment destination, with net inflows reaching $11.05bn in 2022, down from the $72.02bn recorded in 2018.

In a move showcasing trust in Germany’s economic resilience, the investments pledged in 2023 were of higher value than in previous years. The largest came from bp, with the British oil and gas giant announcing plans in July to invest $7.36bn in two offshore wind farms in the North Sea. In September, UK-based data centre provider Virtus said it would open a $3.22bn mega-campus project in Wustermark, 12km outside Berlin.