Published by Global Banking & Finance Review®
Posted on December 8, 2025
2 min readLast updated: January 20, 2026
Add as preferred source on GoogleGartner's report indicates a decline in AI investment among automakers, with only 5% expected to sustain growth by 2029. Success hinges on tech-savvy leadership and a digital-first approach.
BERLIN, Dec 8 (Reuters) - Only a handful of automotive companies are likely to sustain ambitious artificial intelligence investment in the coming years, a study released on Monday showed, raising doubts over whether current industry "euphoria" will deliver lasting benefits.
By 2029, just 5% of automakers will maintain strong AI investment growth, down from over 95% today, technology research firm Gartner said in its report on 2026 predictions for the sector.
The study found that only carmakers with strong software foundations, tech-savvy leadership and "a consistent very long-term focus on AI" are expected to pull ahead, potentially deepening a competitive AI divide.
Volkswagen and other legacy manufacturers, long known for engineering rather than software skills, are battling to catch up with new tech-driven rivals such as Tesla and BYD.
Many legacy automakers are trying, but internal obstacles and outdated mindsets hold them back, Gartner analyst Pedro Pacheco told Reuters.
Success requires companies to become "digital-first" organisations, eliminating internal obstacles and prioritising technology at the highest levels, including direct reporting lines of software leaders to CEOs, Pacheco said.
"A company that is not great at software ... is going inevitably to struggle," he added.
(Reporting by Rachel More, editing by Kirsti Knolle)
Artificial Intelligence (AI) refers to the simulation of human intelligence in machines programmed to think and learn. It encompasses various technologies, including machine learning and natural language processing.
Investment growth refers to the increase in value of an investment over time. It can be measured in terms of capital appreciation, dividends, or interest earned.
A competitive divide occurs when certain companies or sectors outperform others due to advantages such as technology, resources, or market positioning, leading to disparities in success.
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