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

So 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 the geopolitical environment stays more or less stable. Yes.

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. You know, so since we're talking about these distributed smaller factories around the world to mitigate some of the risks and uncertainty, what kind of opportunity does that open up for you? For Siemens, it's very simple: a lot of those factories need to be much more intelligent, flexible, and automated because you cannot just build factories of the past that produce a million times the same thing. You need shorter product life cycles and more flexibility. For example, in consumer environments, if I don't have that type of chip for my television, I'll take another chip and recertify it. In food and beverage, new recipes are being put into place. So we see factories becoming more adaptive, needing more automation and AI. Cheap labor is no longer a differentiator.

So what we see, we tested it ourselves. In our key factories we now have 50 to 100 AI models working and optimizing production, and we see a huge increase in productivity. It's in small steps, not big things. Most AI models at the moment are consumer AI models that help with text. Industrial models are based on time series data, which are much larger datasets. So we are redefining models for 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. We hired a team in Seattle to build those new models, but we also have this distributed across the world. Our main AI leader is sitting in Pune, India. So it's a combination of talent from the west coast, China, India, and Europe.