Germany AI in Manufacturing
Overview
The number of new AI startups in Germany is constantly growing. The AI market has seen a tremendous growth of 67% in the past year, with 508 startups by the end of 2023. This significant growth and development is expected to continue until 2030. Manufacturing is one of Germany’s key industries, where a surge in startups is currently recorded. Other industry sectors experiencing rapid growth are the human health and transportation sectors. Germany ranked amongst the top 10 of the 2023 Network Readiness Index (NRI), a measure of the state of technology infrastructure in various countries. Germany also ranked 3rd on a worldwide scale of robot density in manufacturing in 2022, after South Korea and Singapore. Despite Germany’s concerns about data protection, Germany is at the forefront of AI implementation (this data is according to a Statista report about Industry 4.0: in-depth market analysis).
Government
The German federal government developed an AI Action Plan aimed at expanding computing capacity and funding centers of AI excellence. One notable project is the Innovation Park Artificial Intelligence (IPAI) in Heilbronn, which will be one of Europe’s most ambitious AI ecosystems. Its objective is to provide startups, businesses, research institutions, and public sector stakeholders with the opportunity to put AI into practical applications. The Government also announced to provide EUR 1.75 billion funds to support tech startups.
To foster a global, collaborative industrial data space, the Federal Ministry of Economics and Climate Protection launched the Manufacturing X initiative. Together with ten other nations (Austria, Canada, France, Italy, Japan, Korea, the Netherlands, Spain and the United States), Germany forms part of the International Manufacturing-X Council (IM-X). The initiative is to become a cross-sector digital ecosystem for data exchange, where data-based collaboration between industrial companies is promoted and encouraged.
Opportunities in different industry sectors
Artificial Intelligence is an important driver of innovation and efficiency in the German economy, optimizing processes and reducing costs. AI helps to address the challenges of workforce shortage. These applications are especially widespread in the German manufacturing sector. The German industry is a leader in AI integration. Progress in innovation is essential for the country’s global competitiveness. According to a survey conducted by the ifo Institute in 2023, 17 percent of German manufacturing companies use AI in early 2024 and around 40 percent are discussing its implementation.
Examples of AI implementation in German industry:
- Automotive: Use of AI to improve sensor technology and to develop autonomous driving
- Logistics: Develop more efficient route planning, supply chain optimization, and warehouse management
- Health: Improve personalized treatments using better data processing. New AI algorithms can lead to faster drug discovery and development
Recent investment announcements
AWS announced its plans to invest EUR 7.8 billion into the AWS European Sovereign Cloud. In the State of Brandenburg, the first AWS Region will be launched in 2025.
Microsoft announced to invest three billion euros in Germany over the next two years in early 2024. The main focus is to invest in data centers, thereby strengthening Germanys’ position as an AI hub.
In 2023, Apple revealed an additional investment of 1 billion euros in Germany over the next six years. This comes on top of the 1 billion euros which had already been announced in 2021.
Relevant Trade shows in Germany
Hannover Messe: March 31 – April 4, 2025, Hannover
Automatica: 24.-27. June 2025, Munich