Artificial Intelligence News | October 2025

German Start-ups Embrace AI

German companies are embracing AI according to a recent Bitkom study. Around 82 percent of tech start-ups currently use AI – compared to just 49 percent two years ago. A further 16 percent plan to adopt AI in the near future. Eighty-nine percent of all companies surveyed by the digital association consider AI as being the most important future technology, with more than half of the belief that start-up failure to adopt AI represents a real threat to long-term company survival. Almost three quarters of tech start-ups questioned also conclude that AI products make it easier to raise new capital, with AI typically being deployed to optimize internal processes and develop new products. 

Stuttgart Makes Case for AI Incubator Role 

Germany’s Schwarz Group and the High-Performance Computing Center Stuttgart (HLRS) took advantage of a recent visit by EU Digital Commissioner Henna Virkkunen to position Stuttgart as a potential AI gigafactory location. Virkkunen’s Stuttgart visit was part of a whistlestop tour of 13 AI factory sites being developed under the European AI Action Plan. The project partners used the visit to reinforce their claims to secure a position for Stuttgart as one of five planned AI Gigafactories in Europe. Stuttgart’s “HammerHAI” AI factory was launched in April and is one of the first two German sites in the EU program. The facility targets organizations looking to train, test, and scale AI models with Stuttgart acting as a central hub for AI research, innovation and collaboration between tech companies, start-ups and academic institutions in the region. According to HLRS Director Bastian Koller, more than 70 industrial clients already use the ecosystem, with 30 more potential clients expressing interest since the project’s launch. “HammerHAI can serve as an incubator before a German or European Gigafactory is built” he observed, emphasizing the import of early access to large-scale systems. Stuttgart-based start-up Seedbox AI has been cited as a case in point, using HLRS computing power to train and deploy its own language models instead of cloud services provided by operators like Amazon or OpenAI. The EU’s gigafactory initiative seeks to build powerful AI infrastructure with at least 100,000 GPUs per site. Germany’s largest system — the “Jupiter” supercomputer in Jülich – currently has around 25,000 GPUs. The Schwarz Group’s initiative is supported by around 110 industry, research and public sector partners drawn for the Baden-Württemberg region and beyond. 

Digital Minister’s Plans to Quadruple AI Start-ups

Germany’s digital minister Karsten Wildberger has announced plans to quadruple the number of AI start-ups in Germany within the next three years. Speaking at the Big Bang AI festival in Berlin, the digital minister presented a much-discussed digitalization project aimed at enabling online company formation in just 24 hours. Initial pilot projects are already up and running, with different federal structures and red tape identified as obstacles to be overcome in order to strengthen start-up growth. 

Black Forest Labs Closes EUR 140 Million Deal with Meta

Freiburg-based Black Forest Labs has signed a EUR 140 million deal with Meta according to Bloomberg. The social media giant will use the start-up’s AI image generation tools that have in some cases outperformed US competitors. The company most recently developed an image generation tool for xAI’s Grok chatbot as part of a business relationship that has now ended. The agreement represents a significant step on the global AI stage for the AI start-up which is establishing itself as major generative AI international contender.

Researchers Use AI to Map Urban Heat Stress 

Researchers from the University of Freiburg and the Karlsruhe Institute of Technology have developed a new AI-based modeling system that provides urban planners with a detailed view of heat stress in cities. The system calculates heat development in densely populated and heavily developed inner cities to a square meter using geodata, weather forecasts and other climate data. The researchers believe that the model could be applied to all major cities, allowing adaptation and emission reduction measures to be implemented in timely and necessary fashion. Recurrent heat waves in Europe have increased awareness of the need for effective climate adaptation measures to adequately respond to global warming.