A robotic arm gets to work at German manufacturer Rittal’s smart factory in Haiger, to the west of Hesse, Germany.
Rittal
Conversational artificial intelligence that can be used to communicate with equipment and generate machine parts. Digital versions of vehicles and planes that can be modified to fine-tune their physical counterparts. And autonomous robots that move as you walk by.
These are just a few of the technologies that will power the factories of the future, according to technologists and industry experts who spoke with CNBC.
In the future, factories will be much more connected, relying on a mix of technologies, from artificial intelligence, data platforms and edge devices to the cloud, robotics and sensors, Goetz Erhardt, Europe lead for Accenture’s digital engineering and manufacturing division, told CNBC.
“These technologies support fully automated, ‘dark’ plants, automated decision-making, enhanced equipment monitoring, and new production networks with recycling and upcycling capabilities,” Erhardt said via email.
Today’s factories — from those used in machinery and automobiles to food processing plants — have progressively become more advanced with regard to adopting technology. Robotic arms involved in the manufacturing process — adding and removing materials, welding and placing goods on pallets — are now a common sight.
More advanced A.I.
As much more advanced artificial intelligence technologies are added into the mix, the industrial manufacturing process could shake up further. Conversational systems such as OpenAI’s GPT could one day become integrated into robotics, enabling more sophisticated, emotionally intelligent machines.
“Generative AI (AI that makes new content in response to user inputs) has enormous potential in manufacturing for equipment optimization, interaction and intelligence — from robotic processes through to machining,” Simon Floyd, director of manufacturing and transportation industries at Google Cloud, told CNBC.
Google is among the tech world giants looking to capitalize on large language models, which can generate more humanlike responses thanks to the huge amounts of data they are trained on. The company launched its own AI chatbot Bard earlier this year to rival OpenAI’s ChatGPT.
Consumer products aren’t the only focus of Google’s AI efforts. The company recently upgraded its cloud platform for manufacturers to more efficiently pull data from machines and detect anomalies in the production process.
Going forward, AI will be able to “converse using natural language with manufacturing equipment to understand the current state and the predicted future performance — therefore assisting people and allowing them to focus on high value tasks,” Google Cloud’s Floyd told CNBC.
Floyd said that Google is already working to achieve this with natural language processing capabilities in its AI tools. The company has also created a language model for robots called PaLM-E, which gathers sensory information from the physical environment, as well as text-based inputs.
Engineers will eventually be able to develop new machinery using generative AI tools, Floyd said.
“In the future, there is potential to generate content from and for many types of manufacturing equipment, ranging from specific repair instructions to software code that is tailored to a specific asset.”
‘Digital twins’
One development many industrialists are excited about is “digital twins” — 3D digital replicas of objects in the physical world that can be modified and updated in parallel with the items they aim to mimic.
One example of a company using digital twins to aid its physical manufacturing is Rolls Royce, whose engineers create precise virtual copies of its jet engines and then install sensors and satellite networks on-board to feed back data to the digital copy in real time.
“For every modern Rolls Royce jet engine up on a plane in the sky, there’s one in the cyber sphere that needs to be maintained, working out how much stress is going through the plane,” said John Hill, CEO of Silico AI, a startup that focuses on digital twins for business processes. “That will depend on how the engine is faring in the atmospheric conditions and pressures in the air.”
Digital twins form part of the so-called “metaverse,” which embodies the idea that people will spend more of their work and leisure time in huge 3D digital spaces. Some companies are also looking to incorporate the physical world in some iterations of the metaverse.
Many manufacturers see potential in the “industrial metaverse,” a version of the metaverse tailored to the manufacturing, construction and engineering industries. Accenture’s Erhardt told CNBC that he is mainly seeing use cases in creative collaboration and product development, maintenance and remote repairs, designing and optimizing production operations, and workforce training
“The metaverse could become a game changer for industrial companies once they couple its collaborative, immersive, visual and intuitive dimensions with digital twins fed by integrated data pools across departments, systems, operations technology and IT,” Erhardt said. “This could create a virtual, fully immersive and intuitive simulation of the entire enterprise.”
Safety first
Companies are looking for ways to cut down on more menial tasks in factories with digital technology, amid a wave of labor shortages.
“Previously, automation has not been an option for manufacturing products due to minimal financial resources and investment,” Olivier Ribet, Executive Vice President, EMEAR at Dassault Systèmes, told CNBC.
“However, this is changing rapidly due to technological changes that have decreased costs and democratized automation through low/no code robotics allowing more manufacturing companies to leverage the advantages of automation in terms of precision, efficiency, and productivity.”
There are downsides to consider — not least of which job security — as the rise of AI and digital automation in factories has led to worries about the labor market. Generative AI, a relatively recent development, could erase 300 million jobs, Goldman Sachs estimates.
Still, history shows that technological progress doesn’t just make jobs redundant, it also creates new roles— which typically outpaces the number of jobs displaced. Manufacturers are still scrambling for staff, with 41% of manufacturing businesses citing talent pool as a “very significant” barrier preventing full potential, according to a Bain and Company survey.
The hope is that connecting machines to the internet and integrating sensors and predictive AI algorithms will allow them to more safely navigate their surroundings and work collaboratively with humans, rather than replace them, according to Maya Pindeus, CEO of AI startup Humanising Autonomy.
“Think of the factory, you have robot arms, you have different vehicles to move goods around, you have operators, you have safety cameras,” Pindeus told CNBC.
“What I would look at in the factory of the future is you have high levels of safe automation that can operate around people … I’ve been to factories where you have the big robot arm caged up and it’s really far away from people. It looks very inefficient to me.”
U.S. President Donald Trump holds an executive order related to AI after signing it during the “Winning the AI Race” Summit in Washington D.C., U.S., July 23, 2025.
Kent Nishimura | Reuters
U.S. President Donald Trump has vowed to keep “woke AI” models out of Washington and to turn the country into an “AI export powerhouse” through the signing of three artificial intelligence-focused executive orders on Wednesday.
The phasing out of diversity, equity and inclusion (DEI) initiatives — an umbrella term encompassing various practices, policies, and strategies aimed at fostering a more inclusive and equitable culture — has been a major focus of the second Trump administration. Now, the White House is bringing the battle to AI.
The “PREVENTING WOKE AI IN THE FEDERAL GOVERNMENT” order states that the federal government “has the obligation not to procure models that sacrifice truthfulness and accuracy to ideological agendas.”
The executive order identifies DEI as one of the “most pervasive and destructive” of these ideologies to be kept out of AI models used by the government.
“LLMs shall be neutral, nonpartisan tools that do not manipulate responses in favor of ideological dogmas such as DEI,” the order said, adding that developers should not intentionally encode partisan or ideological judgments into an LLM’s outputs unless those judgments are prompted by users.
As acknowledged by the order, the use of AI is increasingly prevalent across Americans’ daily lives and is expected to play a critical role in the way they learn and consume information — making “reliable outputs” necessary.
In the eyes of the Trump administration, DEI in AI can lead to discriminatory outcomes; distort and manipulate AI model outputs in regard to race and sex; and incorporate concepts like critical race theory, transgenderism, unconscious bias, intersectionality and systemic racism.
“DEI displaces the commitment to truth in favor of preferred outcomes and, as recent history illustrates, poses an existential threat to reliable AI,” the anti-woke order reads.
Without giving specifics, the order refers to past examples of this, including a major AI model that changed the race or sex of historical figures such as the pope and Founding Fathers when prompted for images.
In response to backlash last year, Google had pulled its Gemini AI image generation feature, saying it offered “inaccuracies” in historical pictures. Months later, the company rolled out an improved version.
Instead of “woke AI”, the government should procure “truth-seeking” AI models that “prioritize historical accuracy, scientific inquiry, and objectivity, and shall acknowledge uncertainty where reliable information is incomplete or contradictory,” the order stated.
However, it adds that the federal government “should be hesitant” to regulate the functionality of AI models in the private marketplace.
In other AI developments on Wednesday, the Trump administration signed an order to spur innovation in the technology by removing what it called “onerous Federal regulations that hinder AI development and deployment.”
Another order aims to establish and implement an “American AI Exports Program” to support the development and deployment of the U.S. AI technology stack abroad.
The moves are part of the administration’s “Winning the AI Race: America’s AI Action Plan,” which it says identifies 90 federal policy actions across three pillars: the acceleration of innovation, building of AI infrastructure, and leadership in international diplomacy and security.
Some of the biggest names of Estonia’s tech scene are backing Lightyear, a startup looking to become Europe’s answer to commission-free trading pioneer Robinhood.
Based in London, Lightyear develops an app that lets users invest in a range of over 5,000 stocks, exchange-traded funds and money market funds. It was founded by two former Wise employees, Martin Sokk and Mihkel Aamer, in 2021.
The company is set to announce later on Thursday that it has raised $23 million in a new round of funding led by NordicNinja, a Japanese-backed venture capital fund based in Europe. Estonian tech entrepreneur Markus Villig, who co-founded ride-hailing unicorn Bolt has also invested.
Lightyear CEO Sokk told CNBC that the firm didn’t necessarily need to raise more cash for the business but chose to do so because of the caliber of investors involved.
“People like Markus have been building massive companies in many, many markets, and this is something that’s really exciting for us because it’s so hard to go into all the markets and understand their local dynamics and what people need,” he said.
Lightyear currently operates in 25 countries. However, with help from angel investors like Bolt’s Villig, the firm will be able to launch in another five markets “pretty quickly,” Sokk said.
Villig told CNBC that it can be “challenging to scale a business across multiple countries in a heavily regulated sector,” adding that Europe’s less developed retail investing market provides ample opportunities for disruption.
Other Estonian angel investors who have previously backed Lightyear also participated in the funding round, including Wise co-founder Taavet Hinrikus, Checkout.com’s formerChief Technology Officer Ott Kaukver and Skype founding engineer Jaan Tallinn.
Estonia is widely considered a prominent tech hub in Europe. The country is home to the highest number of unicorns per capita in Europe, according to the Estonian Investment Agency. Meanwhile, Estonia’s e-residency scheme has also enabled foreigners to become digital residents and launch their companies in the country.
The new round values five-year-old Lightyear at between $200 million and $300 million, significantly higher than its valuation in 2022 when it raised $25 million, according to two people familiar with the matter who preferred to remain anonymous as the information has not been made public.
Pushing into AI, crypto
Alongside the additional funding, Lightyear is also launching new artificial intelligence features. AI has been a hot area of investment for startups following the explosive popularity of generative AI services like OpenAI’s ChatGPT.
One of the features, called “Why Did It Move,” allows users to select a point in time on a stock chart and see what happened that day to cause a jump or fall in a company’s share price. The firm is also using AI to provide “bull” and “bear” theses on stocks as well as short updates on assets in their own portfolios.
“In the end, you’re going to have two models” when it comes to investing, according to Sokk: “Self-driving money,” where you ask an AI to achieve certain investment goals, and a “manual gearbox” approach of figuring out different strategies and approaches on your own.
Still, the market for online investment products is heavily competitive. Lightyear faces some hefty competition from both incumbent brokerage services as well as more modern tech players such as Robinhood, Revolut and Trade Republic.
However, Sokk insists Lightyear is building a differentiated enough product to stand out from the crowd. While competitors like Robinhood profit from offering risky products like crypto and margin trading, Lightyear is focused on serving long-term investors, he told CNBC.
To that end, Sokk said Lightyear is planning on rolling out a crypto product of its own in two months’ time — one that’s “more focused on a long-term view.”
Sundar Pichai, CEO of Alphabet Inc., during Stanford’s 2024 Business, Government, and Society forum in Stanford, California, April 3, 2024.
Justin Sullivan | Getty Images
Google is going to spend $10 billion more this year than it previously expected due to the growing demand for cloud services, which has created a backlog, executives said Wednesday.
As part of its second quarter earnings, the company increased its forecast for capital expenditures in 2025 to $85 billion due to “strong and growing demand for our Cloud products and services” as it continues to expand infrastructure to power more AI services that use its cloud technology. That’s up from the $75 billion projection that Google provided in February, which was already above the $58.84 billion that Wall Street expected at the time.
The increased forecast comes as demand for cloud services surges across the tech industry as AI services increase in popularity. As a result, companies are doubling down on infrastructure to keep pace with demand and are planning multi‑year buildouts of data centers.
In its second quarter earnings, Google reported that cloud revenues increased by 32% to $13.6 billion in the period. The demand is so high for Google’s cloud services that it now amounts to a $106 billion backlog, Alphabet finance chief Anat Ashkenazi said during the company’s post-earnings conference call.
“It’s a tight supply environment,” she said.
The vast majority of Alphabet’s capital spend was invested in technical infrastructure during the second quarter, with approximately two-thirds of investments going to servers and one-third in data center and networking equipment, Ashkenazi said.
She added that the updated outlook reflects additional investment in servers, the timing of delivery of servers and “an acceleration in the pace of data center construction, primarily to meet Cloud customer demand.”
Ashkenazi said that despite the company’s “improved” pace of getting servers up and running, investors should expect further increase in capital spend in 2026 “due to the demand as well as growth opportunities across the company.” She didn’t specify what those opportunities are but said the company will provide more details on a future earnings call.
“We’re increasing capacity with every quarter that goes by,” Ashkenazi said.
Due to the increased spend, Google will have to record more expenses over time, which will make profits look smaller, she said.
“Obviously, we’re working hard to bring more capacity online,” Ashkenazi said.