Davos 2026 LIVE | In Conversation With Cedrik Neike Board Member, Siemens AG | WEF | N18L

The key growth drivers is actually an economy which is recovering but also with all of the geopolitical changes. So there you have technology changes, geopolitical changes and talent changes. So people have to adapt and that's normally investment.

We see consumer demand being strong. So there's going to be investment to fuel the consumer demand. So we see investment in infrastructure but also investment in industry. So we see actually 2026 to be a reasonably good year.

We see the first sign of a pickup but after sort of one or two years which were more difficult in that direction. So there's some type of recovery. So geopolitical environment stay more or less stable.

So there's two elements. There's a direct element for Siemens less because we're very local in terms of our production capabilities etc. But our customers tend to, if there's tariff impacts, to be more careful on when they do their investment. However, what we see is also more and more factories are being localized. So we see Make in India, we see in China, we see Make America Great Again. So the investments and the industrialization is happening much more locally than it was in the past. In the past you had a couple of big factories feeding the world. Now the factories become smaller and much more distributed around the world.

For me, as Siemens, it's very simple. A lot of those factories need to be much more intelligent, much more flexible, much more automated because you cannot just build the factories of the past where you produce a million times the same thing. You need to have product life cycles which are much shorter. You need to be much more flexible. I'll give you an example. This goes even in the consumer environment. People say okay if I don't have that type of chip to build my television, I'll take the chip from somewhere else. So I need to recertify it and build it in a flexible way. It goes even in consumer environments for food and beverage. What type of new recipe is being put into place. So we see the factories to be much more adaptive than in the past. But it needs more automation and it needs more AI, and cheap labor is not the differentiation anymore. That's a big thing which we also see.

So what we see, we tested it ourselves. In our key factories we now have 50 to 100 AI models which are working and optimizing the production and we see a huge increase in productivity. Why? It's actually in small steps, it's not big things which are happening. So small sort of definition in this direction. But the key thing with AI, most of the AI models at the moment are consumer AI models that help you to write a text etc. Industrial models are basically based on what is called time series data. So this is way bigger amounts of data which basically define how it is. So we are redefining the models based on industrial environments to be more flexible.

We announced already that we are investing more than a billion. We did this at the last capital market day. What we've done is we hired a team in Seattle to be able to build those new models, but we also have this distributed across the whole world. So a lot of our main AI leader internally is sitting in Pune, in India. So it's a combination of what we find on the West Coast, what we find in China, what we also find in India and in Europe in terms of talent.