Software Defined Vehicles
From hype to big business
Germany’s AI market grows by nearly 50% in 2026
Carmakers such as Mercedes-Benz are already using generative AI in areas including production.
Mercedes-Benz
Germany’s AI market is expanding rapidly as companies move from pilots to productive use. Bitkom expects spending on AI software, services and hardware to rise 48% to €28.7 billion in 2026, with generative AI driving much of the growth.
Spending on artificial intelligence in Germany is accelerating sharply. According to digital industry association Bitkom, expenditure on AI software, services and hardware is set to rise by 48% to €28.7 billion in 2026, up from €19.4 billion last year.
The figures, based on IDC data, point to a market moving from experimentation towards broader productive deployment. The same shift is visible in automotive, where AI has moved beyond isolated pilot projects in engineering and development. Bitkom President Ralf Wintergerst says companies of all sizes and across industries are using AI to speed up processes and improve products.
What is driving Germany’s AI boom?
Generative AI is the main growth engine. Spending on applications such as ChatGPT, Claude, Copilot and Gemini is expected to double from €5.7 billion in 2025 to €11.5 billion this year. Generative AI now accounts for roughly 40% of Germany’s total AI market. The broader investment trend is also visible in moves such as Google opening a new AI centre in Berlin.
AI software takes the largest share of expenditure. Bitkom expects spending in this category to reach €16.0 billion in 2026, an increase of 65%. AI-related services are forecast at €6.8 billion, up 30%, while hardware investment is expected to climb 32% to €5.8 billion.
The growth trajectory is not expected to flatten next year. IDC forecasts that Germany’s AI market will expand by another 40% in 2027 to €40.3 billion. For automotive, the figures underline how AI-supported engineering is being scaled across existing toolchains and workflows rather than remaining a collection of stand-alone experiments.
