“AI Winter Is Coming to the Car Industry?” — Why Most Automakers Are Slashing AI Spending by 2029
The buzz around self-driving cars and smart, AI-powered vehicles has reached fever pitch — yet a new forecast warns that this moment might be more hype than a sustainable trend. According to a recent study by Gartner, only about 5% of automakers worldwide are likely to maintain strong AI investment through 2029. That’s a dramatic drop from the over 95% currently pouring resources into AI. (Reuters)
🚗 What’s Changing in the Automotive AI Race
- Gartner describes the sector’s current mood as “AI euphoria” — many automakers have rushed in hoping to tap into the transformative potential of AI, even if they lack the right digital infrastructure. (TechRepublic)
- In reality, only automakers with solid software foundations, data maturity, and tech-savvy leadership are expected to sustain AI momentum. Others — especially traditional carmakers focused on mechanical engineering — face structural barriers. (Gartner)
- The result? A looming “digital divide” in the auto industry — where a small group of forward-looking firms pull ahead, and many legacy manufacturers get left behind. (Asianet Newsable)
What Automakers Still Get Right — and What’s at Risk
✅ Where AI might stick
- Firms with long-term vision, data infrastructure, and leadership committed to tech — think newer players or legacy firms undergoing serious digital transformation — are still expected to harness AI for next-generation vehicles and operations. (FastBull)
- According to Gartner, by 2030 we may see the first automaker achieve fully automated vehicle assembly lines, using advanced robotics to reduce labour costs and speed up production. (Gartner)
⚠️ What’s likely to unravel
- For many, the early surge of AI won’t yield the “disruptive value” they anticipated — lacking data infrastructure, software talent, or internal alignment, ambitious AI plans may stall or be abandoned altogether. (TechRepublic)
- The shift accelerates a structural divide: companies good at software and data will thrive, while those rooted in traditional engineering may struggle to catch up. (Yahoo Finance)
Why This Matters — for Industry, Consumers, and the Future of Mobility
This shift could reshape the competitive landscape of the auto industry: instead of a broad wave of “smart cars,” we may see two automotive tiers emerge:
- A tech-driven elite, building cars around software, AI, data and automation.
- A traditional group, focused on cost-efficient manufacturing and basic engineering, possibly falling behind in features, digital integration, and automated manufacturing.
For consumers, that could mean: more advanced vehicles — but only from a shrinking number of automakers. For workers, fully-automated assembly lines may reduce demand for traditional factory labour — even if new roles in robotics maintenance and software oversight emerge. (Gartner)
The decline in broad AI investment also raises questions about whether current “AI hype” in automotive was always over-blown — or just ahead of its time.
Glossary
- AI euphoria — A phase where companies enthusiastically invest in AI projects, often without the infrastructure or long-term plan to deliver meaningful returns.
- Digital-first organisation — A company structured around software, data, and digital processes rather than traditional manufacturing or hardware-centric models.
- Fully automated vehicle assembly — An automotive production line where robotics and AI systems replace most human labour, from welding and painting to final inspection.
What This Means Going Forward
The near future of automotive AI won’t be a one-size-fits-all revolution. Instead, expect a split industry: a smaller group of “AI-first” automakers pushing boundaries — and a majority retreating from ambitious AI plans. As the dust settles on the current frenzy, only firms that combine vision, software fluency and bold leadership will lead the race.
Source: Tech in Asia — Most automakers likely to cut AI investment by 2029 (via Gartner report)
