THE CRUNCH

Germany's federal government has signed a Joint Declaration of Intent with NVIDIA, committing the two sides to work together on advancing AI models for what the industry calls physical AI. The declaration was signed at the Invest in Germany Summit by Chancellor Friedrich Merz, the Federal Ministry for Economic Affairs and Energy and the Federal Ministry for Research, Technology and Space, together with NVIDIA. It aims to fuse Germany's engineering and manufacturing base with AI technology and to build what the government calls a state-of-the-art industrial AI ecosystem in Europe.

The pact formalises and expands NVIDIA's collaboration with Germany's "Industry 4.0 Platform", a body drawing together politics, industry, research and trade associations. Later the same day, at a Berlin conversation in the Kraftwerk hall, a former power station, Merz told NVIDIA CEO Jensen Huang that his government is "fully committed" to being one of the most advanced places in the world to work with AI, and urged the Mittelstand, Germany's small and medium-sized businesses, to open their data to AI tools. Huang, whose company's ties to German industry stretch back to gaming systems and automotive design in the early 2000s, framed the effort as a new industrial revolution in which AI augments rather than replaces existing expertise.

Huang also announced planned investments in four German startups: Agile Robots, which builds AI-powered robots for manufacturing, logistics and healthcare; Avelios Medical, which develops an AI-native hospital information system; Mirelo, which makes AI models that generate sound effects, speech and music for video; and Reflex Aerospace, a Berlin scaleup designing satellites ready for launch in about 12 months. The investments form part of a nearly $10 billion NVIDIA commitment across Europe, where the company already backs firms including n8n, Neura Robotics and Black Forest Labs.

Separately, Siemens announced a partnership with NVIDIA to advance AI-driven autonomous factories, showcasing new AI solutions at its Erlangen factory. Siemens says a fully virtual production ramp-up there cuts engineering effort by up to 85%, while agent-based production planning enables cost savings of up to 20%. Merz, for his part, proposed checking in with Huang at least once a year to review Germany's progress.

WHAT HAPPENS NEXT

Merz has proposed meeting Huang at least annually to assess Germany's AI progress, a commitment worth watching as the joint initiative takes shape.