{"id":158276,"date":"2025-11-29T00:12:19","date_gmt":"2025-11-29T00:12:19","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/158276\/"},"modified":"2025-11-29T00:12:19","modified_gmt":"2025-11-29T00:12:19","slug":"germanys-industrial-titans-embrace-the-ai-age-dw-11-28-2025","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/158276\/","title":{"rendered":"Germany’s industrial titans embrace the AI age \u2013 DW \u2013 11\/28\/2025"},"content":{"rendered":"

Germany<\/a> has been warned for years that it risks becoming an “industrial museum”\u00a0unless it embraces radical modernization \u2014 and that includes\u00a0artificial intelligence<\/a> (AI).<\/p>\n

Productivity in Europe’s biggest economy has barely grown for 15 years, export share in automobiles\u00a0and machinery is shrinking and Germany’s energy costs are among\u00a0the highest in the G7 group of wealthy nations. Together, this has created a toxic mix that is steadily eroding the country\u2019s global competitiveness.<\/p>\n

Policymakers and business leaders believe a\u00a0narrow window exists to reverse the\u00a0slide by fully embracing AI\u00a0in factories and supply chains, helping the country to play catch-up<\/a> with the world’s two biggest players, the United States<\/a> and China<\/a>.<\/p>\n

Speaking at the inauguration of Europe’s first exascale supercomputer, Jupiter, in September, German Chancellor Friedrich Merz<\/a> noted that the two global powers are in a “neck\u2011and\u2011neck race to compete for future market share in an AI\u2011supported global economy.”<\/p>\n

“We in Germany\u00a0and we in Europe\u00a0have every opportunity to catch up and then keep pace,”\u00a0he told attendees of the launch ceremony in the town of Juelich in\u00a0western Germany.<\/p>\n

The US and China\u00a0have pushed\u00a0ahead with AI models such as\u00a0ChatGPT<\/a> and DeepSeek, advanced chips and industrial-scale stress tests of\u00a0data centers.\u00a0Their early\u00a0tests prove\u00a0their systems can handle AI workloads at business-critical scale without downtime.<\/p>\n

Germany’s ‘Jupiter’ supercomputer a European accomplishment<\/p>\n

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Never-ending AI pilot projects<\/p>\n

Germany’s industrial giants<\/a>, meanwhile, have been accused of being trapped in so-called pilot purgatory, experimenting with AI but hesitant to fully roll out ambitious projects.\u00a0<\/p>\n

Bosch, for instance, launched generative AI pilots in its factories in late 2023 to optimize production scheduling and monitoring. Volkswagen, in collaboration with Siemens, has\u00a0tested AI\u2011driven digital-twin factories\u00a0\u2014 virtual replicas of production lines that allow engineers to simulate, predict\u00a0and improve performance.<\/p>\n

While these projects have been\u00a0praised as innovative, until recently, they were\u00a0still confined to limited trials rather than full or partial rollout, often due to legal and safety concerns.<\/p>\n

“Many [German] firms still lack clear AI strategies and change-management capacity,”\u00a0AI expert and author Thomas Ramge\u00a0told DW. “So pilots don’t scale into core operations.”<\/p>\n

Once the Germany’s\u00a0industrial leaders can prove AI’s economic benefits<\/a>, Ramge added, the country\u2019s deep manufacturing know\u2011how and\u00a0network\u00a0of small and medium\u2011sized suppliers that feed into\u00a0major supply\u00a0chains will help German firms to play catch\u2011up.<\/p>\n

\"ADresden startup Wandelbots develops software that lets firms program industrial robotsImage: Sylvio Dittrich\/imageBROKER\/picture alliance<\/p>\n

Germany’s Economy Ministry forecasts that AI could\u00a0deliver at least one extra percentage point of annual real GDP growth from 2026 onward.<\/p>\n

Germany hampered by talent, chip shortages<\/p>\n

As well as competing globally for the best tech talent and the high-end chips needed to power AI, German firms remain risk-averse amid high up-front costs and a corporate culture that still prizes caution over disruption.<\/p>\n

They must also grapple with regulatory uncertainty, especially with regard to\u00a0the European Union’s<\/a>\u00a0AI Act,\u00a0which critics say is overly complex, vague in its definitions\u00a0and has strict compliance rules\u00a0on applications deemed high-risk. The European Commission has proposed delaying the act’s full rollout<\/a> until August 2027.\u00a0<\/p>\n

Despite the many hurdles, Germany’s AI adoption is accelerating rapidly. According to a survey published in May by\u00a0the ifo Institute in Munich, 41% of companies now use AI in their business processes \u2014 a 27% jump from the previous\u00a0year. Nearly one in five firms plan to adopt it soon.<\/p>\n

Germany’s industrial leaders are clearly setting the pace, with more than half already deploying AI.\u00a0Yet the survey also highlights lingering concerns.\u00a0Many smaller firms and sectors \u2014\u00a0including\u00a0retail, hospitality\u00a0and construction \u2014\u00a0remain hesitant, with some saying AI is not even on their agenda.<\/p>\n

Beyond uneven adoption, the survey reveals a looming labor market\u00a0challenge. More than a quarter of German firms\u00a0expect AI to result in cut jobs over the next five years, while only a small minority foresee new positions opening up.<\/p>\n

Alexandre Mendonca, an affiliate fellow at the Brussels-based think tank Bruegel, thinks this is ironic due to labor shortages sparked by the global AI boom.<\/p>\n

“German firms are having a hard time finding specialists to work with this type of technology \u2014 it\u2019s actually one of the highest rates in the EU,” Mendonca told DW. “Adoption is not enough \u2014 capacity to use AI is crucial.”<\/p>\n

Digitalization and AI: Jobs on the brink?<\/p>\n

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Germany’s growing AI successes<\/p>\n

Germany may be cautious in fully rolling out industrial-grade AI, but one of its business\u00a0giants is\u00a0already shaping the global infrastructure behind the current AI boom.\u00a0<\/p>\n

Siemens is a key part\u00a0of Europe’s “Data Center Four”\u00a0\u2014 also made up of France’s Legrand, Schneider Electric and ABB from Switzerland \u2014\u00a0which provide\u00a0the automation systems, power grids, and cooling technologies that keep hyperscale AI facilities running reliably. These are the only four European firms that\u00a0can match\u00a0Silicon Valley for size.<\/p>\n

Germany\u2019s automotive sector<\/a> is also rolling out AI at scale, with more than 70% of carmakers and parts suppliers\u00a0already using it in production, according to the\u00a0ifo survey.\u00a0<\/p>\n

Yet, as Ramge cautions, these deployments are critical but may not be enough to tackle the many headwinds facing the auto industry, including volatile electric-vehicle (EV) demand, soaring energy costs\u00a0and fierce competition from China.<\/p>\n

“AI will be a necessary condition for [auto industry<\/a>] survival \u2014 through software-defined vehicles, smarter production and better supply-chain management \u2014 but it won\u2019t be sufficient on its own,” Ramge told DW. “Strategy, cost structures and industrial policy all have to move in parallel with AI deployment.”<\/p>\n

\"AMore than 40% of German firms now use AI in their business processesImage: Julian Stratenschulte\/dpa\/picture alliance<\/p>\n

Germany has also chalked up AI successes beyond industry. SAP has embedded generative AI into its enterprise software, which is\u00a0used worldwide, via a\u00a0co-pilot named Joule, while insurance company Allianz is deploying AI for risk modeling and fraud detection globally.<\/p>\n

The faster German companies adopt AI, the bigger the gains are expected to\u00a0be, helping to fix some of the country’s biggest issues.<\/p>\n

A\u00a02023 report by business consultancy McKinsey\u00a0predicted that\u00a0annual productivity growth could be lifted by\u00a0up to 1.5% over the next decade, while annual GDP could rise by up to \u20ac450 billion ($520 billion) and German factories could use up a quarter less electricity.<\/p>\n

While Germany\u00a0is ahead of much of the rest of the EU in AI adoption, Bruegel’s Mendonca thinks the country’s progress will continue to be constrained by ongoing talent shortages and a dash\u00a0to train new workers amid\u00a0rapidly evolving technology.<\/p>\n

“Germany’s tech and scientific sectors are at the forefront of AI adoption. These same sectors are also experiencing a shortage of talent,” he said. “That talent does not exist now \u2014 so we have to think ahead.”<\/p>\n

Edited by: Uwe Hessler<\/p>\n","protected":false},"excerpt":{"rendered":"Germany has been warned for years that it risks becoming an “industrial museum”\u00a0unless it embraces radical modernization \u2014…\n","protected":false},"author":2,"featured_media":158277,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[345,343,344,85,46,125],"class_list":{"0":"post-158276","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-il","12":"tag-israel","13":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/158276","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=158276"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/158276\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/158277"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=158276"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=158276"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=158276"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}