Gartner sees sharp decline in automaker AI investment by 2029

Investing.com -- Only 5% of automakers will maintain strong artificial intelligence investment growth by 2029, down dramatically from over 95% today, according to a Gartner study released Monday.

The technology research firm’s 2026 predictions report suggests the current industry "euphoria" around AI may not deliver lasting benefits for most manufacturers.

Gartner found that only carmakers with strong software foundations, tech-savvy leadership and "a consistent very long-term focus on AI" are expected to pull ahead, potentially deepening a competitive divide in the automotive sector.

Traditional manufacturers like Volkswagen, historically known for engineering rather than software expertise, are struggling to catch up with tech-driven competitors such as Tesla and BYD.

Pedro Pacheco, a Gartner analyst, explained that while many legacy automakers are attempting to bridge this gap, they face significant internal obstacles and outdated mindsets.

Success in the AI space requires companies to transform into "digital-first" organizations by eliminating internal barriers and prioritizing technology at the highest levels, including establishing direct reporting lines from software leaders to CEOs, according to Pacheco.

"A company that is not great at software ... is going inevitably to struggle," he said.

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