Industrial AI Activity Jumps More Than 218% as Partnerships, Gen AI, and Physical AI Redefine Manufacturing

Industrial AI activity accelerated sharply in 2025, rising from 66 tracked developments in 2024 to more than 210, as manufacturers and technology providers increased partnerships, acquisitions, investments, and internal initiatives. According to global technology intelligence firm ABI Research, the market’s rapid expansion reflects a move beyond early exploration and into broader commercialization, with generative AI, agentic AI, and physical AI becoming central to industrial transformation. ‌

“Industrial AI is no longer confined to pilots and isolated experimentation,” said Ryan Martin, Senior Research Director at ABI Research. “The volume and composition of activity show that the market is prioritizing deployable outcomes, with partnerships scaling innovation while acquisitions secure the intellectual property and software capabilities needed to operationalize AI across industrial environments.” ‌

ABI Research found that partnerships were the highest-volume transaction type from 2023 through 2025, expanding from 34 in 2024 to roughly 120 in 2025. Generative AI activity climbed from fewer than 10 developments in 2023 and about 30 in 2024 to around 100 in 2025, while physical AI increased from about 30 activities in 2023 to roughly 60 in 2025. The data indicate that AI adoption is being driven by practical business goals, including faster automation deployments, better process optimization, and tighter feedback loops between software intelligence and physical operations. ‌

The report also shows industrial machinery emerging as the leading industry for AI activity in 2025, accounting for 21% of announcements, ahead of electronics at 18%, while discrete manufacturing represented 70% of all AI-related activity. On the technology side, industrial automation led with 119 activities in 2025, compared with 90 for manufacturing software. Vendor activity was anchored by NVIDIA with 56 total activities, followed by Siemens with 42 and Microsoft with 41, while major deals such as Siemens’ $10.6 billion acquisition of Altair Engineering, Emerson’s $7.2 billion acquisition of AspenTech, and SoftBank’s $5.4 billion agreement to acquire ABB’s robotics division underscored the market’s focus on digital threads, robotics, and edge AI. ‌

“As industrial companies push AI closer to production, the market will increasingly reward vendors that can connect models, engineering workflows, and factory systems in a deterministic and scalable way,” Martin said. “What stands out is that competitive advantage is forming around ecosystem control, multimodal intelligence, and the ability to unify digital and physical assets across the industrial stack.” ‌

These findings are from ABI Research’s Industrial AI Investments & Activities Market Data Overview: 3Q 2026 report, part of the company’s Industrial & Manufacturing Technologies research service, which includes research, data, and ABI Insights.