IBM say it is investing $200m in Watson IoT's Munich HQ based on rising demand for solutions blending IoT and AI technologies.
Globally, this is part of a $3bn overall investment to integrate Watson technology with IoT projects.
The German facility now includes hands-on labs (termed cognitive IoT Collaboratories) to facilitate innovation in automotive, manufacturing, electronics, healthcare and insurance industries.
There are now some 6,000 customers worldwide using Watson IoT services, up from just 2000 at the start of the year, it says.
Global Head of IBM'S Watson IoT business, Harriet Green, said: "IBM is making strides to ensure that businesses around the world are able to take advantage of this period of technological transformation and develop new products and services that really change people's lives.
"Germany is at the forefront of the Industry 4.0 initiative and by inviting our clients and partners to join us in Munich, we are opening up our talent and technologies to help deliver on the promise of IoT and establishing a global hotbed for collaborative innovation."