“The car, the truck, the boat … vehicles are now defined as much by their digital as their physical content and that is being driven even faster now by advancements in AI,” says John Reed, global solutions leader, manufacturing and mobility industries, Microsoft.
The data supports what Reeds says and tells an immensely powerful story. Gen AI (artificial intelligence)-based ecommerce and fulfilment optimization will enhance last-mile profitability by 15% and operating costs by 5%. At the same time, shop-floor productivity can be improved by 20% through use of gen AI-based assistance, recommendation, and autonomous systems. Overall, gen AI can help through the entire automotive value chain.
There is no question Gen AI offers big opportunities to many industries. Today, let’s consider how it can help us in the automotive space with a few recent announcements and key takeaways following CES 2025.
But first it’s important to talk about the pace of change. Reed was clear the next five years will truly shape and define the automotive industry for the next 50 years when we examine it in terms of agility, technology, transformation of culture, and appropriate allocation of capital.
At the end of last year and the beginning of this year, we saw some major announcements that will help redefine the automotive space in the days ahead. For instance, Microsoft’s adapted AI models are partner-enabled models.
“These are models that are going to be in the Azure AI model catalog,” says Reed. “You can use our development tools to build, and it helps our partners create a marketplace for their innovation as well as helps them embed those models in their own products.”
At the same time, Microsoft has also introduced reference architectures for mobility, which offer structure and guidance for industry engineers and architects. Microsoft’s reference architectures for mobility include:
- Design and engineering
- Vehicle platform
- Mobility services and customer experience
“What we have done with reference architectures is we have developed a set of detailed technical requirements, documents, and designs that allow our customers to understand how our partners work together with our technology to solve specific problems,” explains Reed.
We see here that collaboration and learning will be key as we drive forward in automotive in the days ahead, as we merge the digital and the physical, which is something Reed and I have discussed at length in the past. These partnerships were on display in four key areas at CES:
- Design and engineering
- SDV (software defined vehicle, automated driving, and engineering toolchain)
- In-vehicle, and
- Security
- PTC
- Volkswagen
- Siemens
- NVIDIA
- Ansys
- Blackberry QNX
- ANSYS
- Cerence
- CyberArk
- Cymotive
- VicOne and more.
At the end of the day, there is a transformation happening in the automotive industry that is being driven by technologies like gen AI. Digital—whether it was the technology provided by Microsoft or what the customers were building—was the centerpiece of CES. This is steering rapid progress across automotive and is being driven by software and data, according to Reed.
“A key to digital acceleration is effectively integrating software-driven product lifecycles—how to build software—into traditional automotive product design and development,” says Reed.
Going forward, Reed suggests planning for the future, being aspirational, focusing on key customer learnings, and building that practical roadmap and very practical steps that can be measured.
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