No two potato harvests are the same, yet each of the 100 million Pringles cans that leaves the Kellanova plant in Kutno in central Poland has to have the crunch and flavor that consumers expect. The process of ensuring that consistency is increasingly guided by artificial intelligence.
Sensors, lasers and cameras feed data on everything from humidity to protein content into software from Siemens AG, which continuously adjusts the recipe for changing raw materials before quality problems can slow production or lead to waste. It’s an example of the promise of industrial AI, a branch of the technology where Europe still has a chance to play a leading role.
While the region has fallen behind the US and China in consumer AI, it has a deep trove of production and manufacturing data and expertise from an industrial sector stretching back more than a century. That gives Europe an opening to develop technology that could eventually automate entire factories to make stuff people need, something chatbots can’t. And a transition to data-driven industry could chart a path forward for its embattled manufacturers in the process.
“We may have lost the race to develop the best language model — that much is clear — but we have by no means lost the race to integrate AI into our companies,” German Economy Minister Katherina Reiche said in May at an economic policy summit for the ruling conservative party. “This is a matter of sovereignty, competitiveness and the survival of this region.”
Mistral AI — Europe’s challenger to global players like Anthropic and OpenAI — is leaning into industrial applications. The region also hosts more AI startups in the manufacturing sector than the US, according to a May report from think tank Interface.
Aside from newcomers, engineering stalwarts Siemens, Schneider Electric SE, Dassault Systèmes SE and ABB Ltd. are embedding AI in their software and automation products to help factories become more productive, more efficient and more competitive. That’s a powerful sales pitch at a time when Europe’s industrial base is under pressure from high production costs, dwindling numbers of skilled workers and growing competition from abroad.
Europe’s not alone in trying to seize on the potential. While US firms such as Emerson Electric Co., Rockwell Automation Inc. and Honeywell International Inc. are moving into machine-learning technologies, the biggest challenge comes from China, according to Nicole Lemke, who authored the Interface report.
China has been doing “quite well in all things manufacturing in general, but also is very strongly focusing on the intersection of robotics and AI,” she said.
Industrial AI is a complex field. A core application is predictive maintenance, which firms already use by analyzing historical data to head off faults before they hamper production.
AI can also enhance quality control on the shop floor. At Trumpf SE & Co. in southwest Germany, for instance, the laser maker uses AI-powered scanners to inspect edges of cut steel sheets to help fine-tune machinery settings.
But some visions go far beyond streamlining operations, aiming to create highly autonomous factories in which AI agents and robots oversee production with minimal human involvement — so-called “dark factories.”
Europe’s challenge is not only developing models but also deploying them quickly enough to stay competitive.
“We probably have two, maybe three years left, but not more than that,” said Sabine Scheunert, managing director for Central Europe at Dassault Systèmes. If Europe’s manufacturers don’t integrate and implement AI into their processes within this window, they won’t be able to catch up with Asia anymore, said the executive, who previously worked at carmakers BMW AG and Mercedes-Benz Group AG.
The problem is that adopting industrial AI requires money, skilled staff, and manufacturing processes standardized enough to automate. Much of Europe’s industrial base lacks one or more of those ingredients.
“We see the fastest rollout in Asia, where new technologies can often be integrated into production more quickly,” said Christian Bruch, chief executive officer of energy-equipment maker Siemens Energy AG.
The spinoff of German industrial giant Siemens has automated a switchgear plant in Shanghai, shifting many tasks from humans to machines and cutting staff in the process. Replicating that in Europe isn’t straightforward.
“The question will be: When and to what extent can I roll it out in Germany? Will it fit into every plant?,” Bruch said.
Laser-maker Trumpf offers a glimpse of what broader adoption could look like. The company says it has improved efficiency by as much as 30% since it began connecting machines in 2015 and now operates so-called smart factories worldwide, including in the US and China.
AI is “a huge game changer,” Stephan Mayer, head of machine tools at Trumpf, said Thursday in a Bloomberg TV interview. “A lot of processes which take a lot of effort, manual effort, can be automated based on AI, so that is a huge potential.”
But in many ways, Trumpf is the exception.
While the family-owned company is one of Germany’s so-called Mittelstand — small and medium-sized manufacturers that make up the backbone of the country’s industrial sector — it occupies a rarefied position. The company already has leading-edge technology with its lasers used by firms such as ASML Holding NV and that gives it resources and expertise many peers don’t have.
That’s evident at Trumpf’s headquarters in Ditzingen. Artwork adorns the walls of its quiet and clean production halls, where autonomous robots shuttle parts between stations and operators oversee equipment in tidy overalls.
Industrial AI typically pays off in the medium term rather than immediately, according to Elisabeth Zock, who leads global customer centers at Trumpf and helps implement automation projects.
“The economic situation in some companies is still strained, making it difficult for them to undertake larger investments,” she said.
Also, small and medium-sized firms often produce small batches, which don’t lend themselves to automation. Even companies that have invested heavily in technology remain far from the industry’s vision of AI agents running factories.
Paul Walczok, whose company PAWA-Tech GmbH employs 12 people in a small town north of Munich, has spent years modernizing his production line, including two automated milling machines for roughly double the cost of conventional equipment. Still, he doesn’t think that full automation makes sense at his plant.
“The final step is the processing work on the machine itself,” Walczok said. “At that stage, you really need skilled workers — that’s absolutely clear.”
Large manufacturers can also struggle implementing the technology across production networks. Only 30% of manufacturers are seeing the benefits of wide-scale digital-transformation projects, according to Cecile Vercellino, senior vice president for industrial automation services at Schneider Electric.
“In Hungary, you will have a different methodology and processes than in Portugal, even if they are in the same company group,” said Vercellino, who advises companies on how to transform. “Scalability is sometimes very difficult.”
Industrial AI also depends on very specific data about machines, materials and processes. Amid deepening concerns about dependencies on China and the US, Europe’s manufacturers are wary of passing such proprietary information along to third parties, which could give an edge to homegrown developers.
Regardless of data-protection sensitivities, Europe’s manufacturers face intensifying pressure to become more productive, and industrial AI is a way to close the gap in competitiveness. Already, some $1 trillion of manufacturing value is at risk of relocating out of Western Europe and the Nordics, according to a May report from Boston Consulting Group.
“There’s really just one simple question,” said Markus Lorenz, a BCG managing director. “Can I boost the productivity of my factories — which are often located in Germany or other high-wage countries — to such an extent that it would be worth it?”
Such pressure, coupled with deep expertise, puts Europe in prime position to be at the forefront of industrial AI, according to Raluca Ragab, a partner at asset-management firm Eurazeo. The growth fund she manages expects assets invested in the sector to rise to more than half from about a fifth now.
“When you have a large industrial base that is suffering because of higher costs and because of loss of competitiveness, that’s when you need to come up with the solutions,” she said. “Change is not optional at this point.”