Siemens AG's Hu Jianjun: AI Applications Enter Second Half, SMEs Show Greatest Vitality

Deep News
09/15

The 2025 China AIGC Innovation Application Forum of the China International Fair for Trade in Services was held in Beijing on September 12, 2025, themed "From Large Models to Intelligent Agents, Driving New AI Ecosystems." Hu Jianjun, Vice President of Siemens AG (China), attended and delivered a speech.

The following is the transcript of the speech:

Thank you very much for the organizer's invitation. I have just heard many updates on the latest developments in AI intelligent agents. Here I would like to share with you how Siemens AG combines AI with industry. AI has become deeply rooted in people's hearts from OpenAI to DeepSeek - even my children have started using AI to write essays. If children can use AI, I want to ask a question: when will our blue-collar workers be able to use AI? When will our blue-collar workers also be able to use AI? I think this is where AI releases its greatest value, which is why we are here today to share how we unlock the multiplier effect of industry powered by AI.

Speaking of AI, I want to review that Siemens AG has been established for more than 170 years and has been in China for more than 150 years. AI is a very hot trend, but looking back, we also want to know what cycle we are in now. As a century-old company, we have already gone through several economic cycles: What was China like in 1872? When Siemens AG signed a comprehensive cooperation memorandum with China in 1985, what was China like then? Siemens AG actually benefited from China's 40 years of reform and opening up, so where should we as a foreign enterprise go in China for the next 40 years? This is also what we are thinking about.

From the perspective of technology cycles, we have the first, second, third, and fourth industrial revolutions. Of course, everyone is very clear that the fourth industrial revolution was actually proposed by Siemens AG, characterized by data and value-driven features. During this period, we have experienced a lot of reconfiguration of production factors and rapid release of productivity. The Industry 4.0 that we jointly proposed with other companies and associations was introduced to China and was called Intelligent Manufacturing 2025 in China at that time, and this year is 2025. So in today's Industry 4.0, we will also re-examine what insights AI, data, and other digital technologies bring to our new industrialization.

From Siemens AG's perspective, we hope to deeply participate in the new round of productivity leap. On our side, we consider more new technologies, new business formats, and of course, new overseas expansion. Chinese companies now feel very intense competition. Where is the way out of this competition? The way out is not to compete domestically until peers are eliminated, but to find incremental growth. So on the topic of overseas expansion, we hope to build a convenient bridge for everyone in China-Europe and China-global markets, which I will mention later.

From the perspective of the three "news":

First is new technology. From Siemens AG's perspective, the new technologies we understand and care about at this starting point are digital twins, software-defined automation, and data and artificial intelligence. Why do we highlight these? As mentioned earlier, AI has now penetrated into entertainment, office work, and the daily lives of the general public. But if AI is to penetrate into industry, there are some foundational work that needs to be done, such as digital twins, which are bridges connecting the physical world and the digital world, also called Digital Twin. For example, if we want to deploy AI in a physical space, how can we do AI training or control without data as a foundation? So here I'll give you some examples.

For example, our digital twin technology - what is a digital twin? I'm thinking that many of you here are from science and engineering backgrounds. No matter what we make - glasses, giant ships, or factories - what are we most afraid of? We are most afraid of making mistakes in physical space. This is a philosophical paradox: how do you find the right answer without making these mistakes? But in the physical real world, every mistake comes at a huge cost. If something is designed wrong on a giant ship, or if a factory's wiring is wrong, readjustment is very expensive.

To solve this philosophical paradox, what should we do? So we hope to make mistakes in digital space, that is, when products are still being designed and factories have not yet been built, create a 1:1 digital twin in digital space, complete all simulations, all verifications, and even today's artificial intelligence in digital space. There will be millions of iterations later. Doing millions of iterations in the physical world would involve huge costs - time costs, money costs, human costs, etc. - which are unacceptable. But we can imagine continuously adjusting in digital space, and I might even have multiple threads of simulation iterations. What is the cost? The cost approaches zero. So this is the most basic thing we say about AI in industry.

Second, let's talk about AI. Here I take Chengdu's digital factory as an example. This is not only a model factory for Industry 4.0, but also our dual beacon factory for sustainability and digitalization selected by Davos. I think what's most exciting about this factory is that front-line operational employees, that is, the new generation of industrial workers wearing blue overalls, can already use some low-code technologies to write simple AI scripts and workflow orchestration in front-line work to accelerate their work. I think this is the most important thing.

Personally, I strongly discourage children from using AI to write essays when learning composition, but I believe if AI, as I just mentioned, can enable our new generation of Chinese industrial workers to master AI skills, this is a key to China's future high-quality development success. In the past, China has always talked about labor advantages and demographic dividends. Now facing "declining birth rates," where are our new resource endowments? I think it lies in the new generation of well-educated industrial workers who have the ability to use new production tools, such as AI production tools. Here Siemens AG is committed to applying AI to industry, and we have been promoting this, including our Industrial Copilot. Several guests just talked about Copilot technology. We use Copilot in office work, autonomous driving, and many other places. Where do I think the second half of Copilot development lies? In industry! We must find ways to enable our robots, people, industrial workers, managers, and intelligent agents to work collaboratively in factories. This is what we have been committed to doing.

Having said so much, we are also talking about how both digital transformation and Industry 4.0 have now entered a "second half." All of our large leading enterprises, including Siemens AG itself, as I just showed you, our Chengdu factory and Nanjing factory are already very advanced. Where is the second half of digital transformation, new industrialization, and AI implementation? It lies in the vast number of small and medium-sized enterprises. From our chain-leading enterprises, it will penetrate to supply chain and supplier enterprises. This is actually the most dynamic part of China's economy because it represents mostly private economy. Private economy doing this will have more market-oriented considerations.

So here, we have also launched new platform business, which is a new business format. Starting from 2022, we are no longer doing single supply because our demand side has undergone profound changes. We have large enterprises, medium enterprises, and small long-tail customers. When profound changes occur on the demand side, we believe the supply side should also have reforms and innovations. Here we launched the Siemens AG Xcelerator platform, which is Siemens AG's X platform, hoping to innovate on the supply side. First, in terms of supply content, it includes our Siemens AG products and third-party partner products, and even third-party products that can help customers. We hope they can all appear on our X platform, equivalent to Siemens AG's app store. This is Siemens AG's X platform. It has both Siemens AG products and third-party products, and we particularly encourage products on it to combine with each other, like Lego blocks building up together, precisely meeting enterprises' needs for digital transformation, low-carbon transformation, and AI-driven requirements.

So behind this, we have established a huge ecosystem and an online e-commerce platform. This is a new paradigm in the B2B field that connects supply and demand, which we have been working hard to promote.

Including our new platform, in the B2B field, everyone may not be quite used to buying related products and services online, but we believe this is a trend in the future. With the deepening of AI and cloud-based SaaS services, more and more services will be delivered online and purchased online. We hope to reduce the most difficult part in B2B scenarios, which is supply-demand matching and transaction completion. We also want to accomplish this. We hope to put all our energy and resources entirely on the right solutions, rather than on business conditions, contract negotiations and other details. These are actually hidden business costs, and for small and medium-sized enterprises, they need very short, very fast decisions. Their logic for digitalization is different from large enterprises and Fortune 500 companies.

What do small and medium-sized enterprises want most? They want things that are understandable, affordable, quick to install, and easy to use - fast, good, and economical. This is different from large enterprises' procurement logic. Large enterprises will make advance deployments, need comprehensive things, and need future-oriented things. We just talked about digital transformation and AI penetration applications now entering the second half. The most dynamic are small and medium-sized enterprises, these supply chain enterprises, private enterprises.

Their decision-making logic is different from state-owned enterprises and Fortune 500 companies. We must not only meet their needs but also be just right, not giving them unnecessary things - they won't pay an extra penny for unnecessary things. This is the conclusion I reached after visiting many small and medium-sized enterprises, because Siemens AG's previous products were very high-end, very strategic, very future-oriented, very advanced and forward-looking. But today we also return to the essence of things: Can I really solve your problems just right? If I can't solve your problems, can my ecosystem partners and I solve your problems together? This is our new logic.

So since Siemens AG alone cannot solve all problems, we need to absorb China's best digitalization, low-carbon, and AI service providers. This is why we launched the "Fanxing Plan" (Starry Sky Plan). What is the main purpose of the "Fanxing Plan"? We will develop our ecosystem together. We hope our producer services industry, which is also the national positioning for this type of enterprise, meaning our service providers can develop together with the platform. Many producer services startups also have many pain points of their own. Currently, our key development areas are robots, software, AI, knowledge education, etc. There are hundreds of excellent champion enterprises we have selected, and we hope more producer services champions will come online to the X platform in the future to reach customers at faster speeds.

From our support perspective for producer services industry, including our ecosystem partners, we have launched corresponding support policies. I have visited many innovative and entrepreneurial enterprises. Their development paths have commonalities: technology-based startups may be in Zhongguancun, the famous Xueyuan Road, Tsinghua, Peking University, or graduates from other schools who start businesses together after graduation. What are these people strong in? They are strong in technology and products. What are they weak in? They are weak in markets and customers. When getting angel rounds, they can get funding with very epoch-making, very innovative products. During A rounds, after products are developed and go through small-scale trial production, they can also get funding.

But to develop, they need to prove their market value. At this time, this type of enterprise's biggest shortcoming is often markets and customers, especially academic-oriented entrepreneurs coming out of schools who lack channels and connections when facing industry. In this scenario, Siemens AG is willing to be the connector between innovative entrepreneurial enterprises and factories. Because we have many factories in our hands that are already Siemens AG customers, we also hope customers can embrace the most advanced innovative entrepreneurial cutting-edge technologies. This is our empowerment for partners.

Producer services industry is also very competitive in China. Digital service providers doing MES are very tough. Where can they really make money? Overseas. We also hope that these producer services and digital service providers who succeed on our platform, we will also put them on the global platform to let them serve global customers, letting them change from earning RMB to earning euros and dollars. This is also our platform's mission.

We have already developed many enterprises. I will not use this method to showcase our partners in the future because we hope to develop excellent champions in the thousands or tens of thousands scale next year, growing together with Siemens AG and other partners, surviving domestically and competing overseas to earn foreign currency. This is our goal.

At the China International Import Expo, we will launch a brand new channel focusing on industrial AI, with rich information, excellent products, comprehensive tool chains and data, and more importantly, like-minded partners and friends. We also welcome everyone to follow and look forward to the channel's launch together.

Thank you all!

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