The Great Industrial AI Consolidation: A New Era of Efficiency or a Recipe for Disaster?

The past five years have seen a seismic shift in the industrial artificial intelligence market, with multibillion-dollar deals and strategic partnerships dominating the headlines. Traditional industrial equipment and software vendors are now rushing to acquire cutting-edge technology to integrate into their offerings.

At the forefront of this consolidation is Schneider Electric, which has made two major acquisitions: AiDASH for $350 million and Cognite for $3.1 billion. These deals will be integrated under AVEVA, a subsidiary of Schneider Electric’s Industrial Automation business unit, giving the company an enterprise value of $11.6 billion.

Siemens is also making waves with its strategic partnership with IFS to connect design, production, and asset performance in one continuous loop. Meanwhile, ABB has set aside $14 billion for future acquisitions, having already spent $5.5 billion on automation company Rotork. Rockwell Automation is following a similar strategy through acquisitions like Knowledge Lens and Clearpath Robotics.

The driving force behind this consolidation is the potential value that can be unlocked by leveraging these technologies. According to Claudio Fayad, chief technology officer of Emerson’s Aspen Technology business, “over $1 trillion of value may be unlocked by 2036” if industry players create, deploy, and orchestrate industrial AI effectively.

This is not just about building AI-native capabilities; it’s also a bet on winning the industrial AI race at the data layer. The industry equipment and software majors are aware that their traditional business models are under threat from digital disruption, and they’re trying to future-proof themselves by acquiring cutting-edge technology.

Some observers believe that this consolidation is a sign of a maturing industry, with companies recognizing the operational advantages that industrial AI can bring. Dan Jeavons, president of Applied Computing, notes that “many in the industry haven’t quite figured out what they want to do with AI or remain wary of it. Yet, they still don’t want to miss out on the very obvious operational advantages industrial AI brings to the table.”

Tie-ups, partnerships, and scale-up investments are becoming increasingly common in this arena, where scale matters. Applied Computing has secured a multi-year agreement with global engineering services provider KBR to co-create industrial AI tools that combine KBR’s engineering expertise with Applied Computing’s models.

Market projections suggest that the global industrial AI and automation market will grow at a compound annual growth rate of around 12% to $570 billion by 2034, up from $200 billion in 2025. The agentic AI market is expected to reach anywhere between $150 billion and $200 billion by then, with a CAGR of over 40%.

However, not everyone is convinced that this consolidation is a positive development. Some observers warn that it could lead to a lack of innovation and a concentration of power in the hands of a few large players. With market projections being floated around as lofty as they are, one cannot help but wonder whether these companies will be able to deliver on their promises.

As the industrial AI landscape continues to evolve, one thing is clear: this consolidation is just the beginning. The next chapter in this story will be written by those who can navigate the complex web of partnerships and acquisitions that are shaping the industry today. Will it lead to a new era of efficiency and innovation, or will it result in a concentration of power and a lack of competition?