Germany steps up AI investment in global innovation race

The German government has sharply increased funding for artificial intelligence research, signaling its ambition to remain a key player in the global tech sector.

Germany and artificial intelligence. Image: Shutterstock

As the global race to innovate in artificial intelligence (AI) intensifies, Germany is making strategic moves to stay competitive.

Last Wednesday, Research Minister Bettina Stark-Watzinger revealed Germany's ambitious plan to double public funding for AI research, boosting investment to almost 1 billion euros over the next two years.

The financial commitment aims to achieve several goals: build 150 university labs, expand the capacity of German data centers and ensure easier access to key data for AI algorithm training.

In the face of artificial intelligence giants such as China and the United States, Germany is determined not to fall behind. However, the challenges are daunting. According to a Stanford University report, the United States will spend $3.3 billion on artificial intelligence research in 2022 alone.

Moreover, US private AI investment soared to $47.4 billion in the same year, surpassing Europe's total spending and significantly surpassing China's $13.4 billion investment.

** "Artificial Intelligence Made in Germany"**

However, Stark-Waczinger believes Germany has a unique advantage, noting the changing regulatory environment in Europe that prioritizes privacy and personal security.

She believes the framework could appeal to AI professionals and businesses, especially when combined with the spirit of collaboration within the EU.

"Our AI is explainable, trustworthy and transparent," the research minister said in a public statement.

Historically, Germany's forays into AI have been measured. The country is home to about 1,600 AI start-ups, a number that is set to double by 2023. However, as Stark-Watzinger admits, this only places Germany in ninth place in the global ranking.

The German government's interest in artificial intelligence is not new. In 2018, Berlin launched the blueprint of "German artificial intelligence manufacturing". The comprehensive strategy outlines 14 goals in 12 action areas.

Key highlights include strengthening AI research, using competition to spur innovation, and motivating businesses of all sizes to embrace AI. The strategy also emphasizes the well-being of German citizens, strong IT security, and the ethical and legal basis for AI research.

At the time, then-Chancellor Angela Merkel asserted, “Germany and Europe must lead in AI. Our prosperity depends on upholding our European values and protecting privacy in this digital age.” It also depends on that."

At the time, the government had allocated around 3 billion euros for its AI strategy, mostly for research. Private sector investment is expected to match these public funds, with an eventual injection of €6 billion in 2025.

However, with the field of artificial intelligence rapidly advancing and the German economy teetering on the brink of recession, Berlin recognizes the need to take a more aggressive stance on this critical technology.

Leading German companies such as BMW, Siemens and Zalando have already applied artificial intelligence to self-driving cars, train coordination and enhanced customer experience, respectively. But the fate of the German economy now hinges on further investment to help its economic champion stay ahead of the competition.

The office of the German research minister did not immediately respond when contacted for comment.