Baden-Württemberg and Berlin Clash Over AI Gigafactory as Merz Visits Stuttgart
A high-stakes visit by Chancellor Friedrich Merz to Stuttgart on tuesday underscored the growing competition between German states for a coveted EU-funded artificial intelligence gigafactory, with Baden-Württemberg Prime Minister Winfried Kretschmann making a forceful case for his stateS suitability.
Baden-Württemberg is positioning itself as a frontrunner in the race to secure one of the five massive data centers, intended to provide cutting-edge computing power for AI growth. the visit, as of October 21, 2025, at 6:38 p.m., saw a carefully orchestrated welcome for the Chancellor, but beneath the surface lay a clear tension regarding the allocation of this crucial investment.
“Baden-Württemberg has a lot to offer,” Merz acknowledged,a remark Kretschmann visibly appreciated. But that’s probably the case.” Kretschmann visibly appreciated the compliment.
However, the cordial atmosphere masked a clear underlying tension. Kretschmann is determined to ensure Baden-Württemberg isn’t overlooked in favor of Bavaria, led by Prime Minister Markus Söder, in this crucial investment decision. “The locomotives also need electricity,” Kretschmann succinctly put it,emphasizing his state’s readiness.
The stakes are high. These gigafactories represent a significant boost to regional economies and technological advancement. A consortium led by Lidl founder Dieter Schwarz is already vying for the project, proposing a location in Brandenburg due to favorable settlement and energy supply conditions, though the benefits would extend to companies within Baden-Württemberg.
Kretschmann outlined a broader partnership proposal to the federal government, encompassing five key areas: chips, the AI gigafactory, aerospace, battery research, and health. “Our request to the federal government: Let us strengthen our strengths together. This is the only way we have a chance of surviving international competition,” he urged.
Merz, while acknowledging Baden-Württemberg’s “disproportionately strong” innovation ecosystem, remained noncommittal on the gigafactory. He noted that five consortia had applied, representing Bavaria, Baden-Württemberg, and North Rhine-Westphalia, and that a decision rests with the EU Commission in Brussels. “We are waiting for the proceedings in Brussels,” he stated, adding that he hopes at least one gigafactory will be located in Germany.
The Chancellor’s visit also included a stop at the Innovation Park for Artificial Intelligence (IPAI) in Heilbronn, touted as the largest AI ecosystem in Europe. The EU Commission is expected to announce its decision on funding for the gigafactories, which carry a price tag of around six billion euros each, by the end of the year, with approximately 30 percent of the cost covered by EU funds.
Beyond the gigafactory debate, Merz highlighted the potential of Baden-Württemberg’s medical technology sector, advocating for relaxed data protection regulations to facilitate research and development. “The ‘very rigid regulations of our data protection’ must be relaxed ‘so that we can also do research and development with data,for example from patients. No personal data is lost, no privacy protection is lost,” he explained. Kretschmann concurred, stating that access to data is “entirely undisputed” and essential for innovation.
The chancellor also revealed he is personally experimenting with AI,having used it to refine wording in proposed legislation related to active pensions. “It was amazing what the AI offered, right down to the wording,” he said, while also acknowledging its limitations when it came to processing complex legal amendments.
A correction was issued regarding an earlier statement about Baden-Württemberg’s ideal conditions for a gigafactory, clarifying that the consortium’s proposed location is in Brandenburg.
Broadcast on Tuesday, October 21st, 2025, at 2:30 p.m. on SWR4 BW Studio heilbronn, the visit signals a pivotal moment for Baden-Württemberg’s ambitions in the rapidly evolving landscape of artificial intelligence. Further facts on innovations in Baden-Württemberg can be found [here](link to further information).
