Germany Launches AI Action Plan to Boost Investments

Germany wants to boost the development of AI at a national and European levels, according to a new AI action plan presented by the Federal Ministry of Education and Research, which aims to push the EU to match the already dominant US and China.

In its action plan, the ministry outlined 12 areas for action, including strengthening the entire AI value chain at the national and EU levels, focusing on connecting the dots with education, science and research.

To implement boost AI development, the ministry has pledged a €1.6 billion investment in AI over the current government’s term.

Specifically, it will promote 50 ongoing measures focused on research, skills, and infrastructure development and complement them with 20 additional AI initiatives.

Research Minister Bettina Stark-Watzinger, said, “if we want to keep up with the US and China, we can only do so with our European partners. If we want to keep up with global competition, Europe is a key factor for us. That is why we want to significantly improve European cooperation in AI and maximise Europe’s impact.”

To show that it is serious about promoting the technology at the EU level, the ministry also announced a high-level AI workshop in Brussels in January 2024 to further strengthen European AI cooperation and identify ways and measures for Europe to become a leader in AI.

At the same time, Berlin underlined that the AI Action Plan is independent of the AI Act, a landmark EU law to regulate Artificial Intelligence based on its capacity to cause harm. Federal Research Minister Bettina Stark-Watzinger repeatedly emphasised that AI needs clear rules, not over-regulation.

With 508 AI startups, the AI landscape in Germany has already seen a massive 67% growth this year compared to 2022, according to the ‘German AI Startup Landscape 2023’ study by the AppliedAI Institute for Europe.

Compared to regular start-ups, AI start-ups in Germany seem to have an extremely high survival rate, with only 42 failing in 2023. The study found that Berlin and Munich are the main locations for AI start-ups.

AI expert Bernhard Schölkopf, said, “I think this is also a question for the future, whether we as Germany will manage to take this topic seriously enough now and ensure that we play a significant role in this development.”

But noteworthy AI projects that hail from Germany are still in the minority.

Stark-Watzinger said, “apart from a few notable exceptions such as Celonis and Aleph Alpha or DeepL, Germany has hardly been able to score any economic successes in AI. Only around 15% of German companies use AI, and this must change if we want to realise the potential.”

Founded in 2011, the Munich-based company Celonis is developing an AI to improve business processes.

Heidelberg startup Aleph Alpha specialises in language models for industry and administrationThe Baden-Württemberg state administration is already using its models, and the startup already raised a second round of funding of $500 million.

Founded in Cologne, the company DeepL has made a name for itself with its translation service, a competitor to Google Translate, and became a so-called unicorn start-up with a valuation of over $1 billion as of January.

There are also high hopes for the JUPITER supercomputer, which will be operational in 2024. The JUPITER system is designed for the largest possible simulations and AI applications in science and industry. With JUPITER, Germany is following in the footsteps of the Finnish supercomputer LUMI and the Italian supercomputer LEONARDO.

Thomas Lippert, Head of the Jülich Research Centre, said, “the JUPITER system will be a massive component, stronger than the previous system. JUPITER will be at least a factor of 25 stronger overall in the simulation area. So that’s a huge rate of increase. Munich and Stuttgart will follow in 2025 and 2026.”

Although the ministry’s spokesperson attributed the two-month delay to fast-developing AI trends, the private sector is still unhappy with the AI action plan.

Dirk Freytag, president of the German Association of the Digital Economy (BVDW), said, “at the same time, the action plan is a swan song for the dovetailing necessary for a strong AI location in the federal government. It remains the classic thinking and acting in silos for a technology that will change the way we act as an economy and a society.”