Volkswagen Group establishes artificial intelligence company

This press release got out yesterday and was discussed in the high-tech community.

While not much has been said other than who the VW managers are responsible for this AI lab, people started asking if this will be a worthwhile effort and of course has a chance to deliver.

This is an effort that sounds great but will be super hard to bring to success.

For one, it is in general very hard to innovate in a large company and set up an entrepreneurial innovation process.

Then secondly, it appears (I had only twice contact with VW professionally and that was a big disappointment each time) VW is not the type of company who can suddenly ramp up AI innovation, become super startup-friendly and then integrate all that into next-gen vehicles too.

In both cases I dealt with innovation projects and in the first one they were the only car manufacturer in all of Europe that we visited who sent us the wrong team into our presentation event.

The second time it was with CARIAD and while we had a very clear value proposition and great offer, it was killed by the "not-invented-here" syndrome which is, to be fair, present in all large companies.

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Success, as often, depends on the setup and more so on the people running it. Even in the most optimistic scenario it is a 5-10 year effort and that might be too long for them to pull off and probably will at some point quietly go somewhere....

Why is it so difficult to succeed with innovation processes in established firms?

9 places that must be addressed (and none of them is to have a cool office space somewhere nice), as from the great mind Tendayi Viki in his great book "Pirates in the Navy":

Leadership Support:

• have a space in corporate strategy
• get proper budget that is independent from how the firm is doing
• get a space within the corporate portfolio management

Organisational Design:

• space in the org chart (so not just absorbed in R&D deep down there)
• collaborate with the core business (and NOT be a separate island excercise)
• bonuses and incentives must be adapted to the real work done there

Innovation practice:

• space for tools such as design thinking, agile, lean startup, business model design tools
• there must be room to fail and learn from it
• train colleagues across different departments

Crucial are quick success cases to gain the credibility within the organization.

It is also not a New Growth project exercise but must be set up to change the overall innovation process and make it repeatable which is a tough political battle.

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I guess now it becomes clearer why this is so hard and why most such Labs actually fail. Will this VW AI lab be different?

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https://www.volkswagen-group.com/en/press-releases/volkswagen-group-establishes-artificial-intelligence-company-18105

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01/31/2024Press Release

Volkswagen Group establishes artificial intelligence company

• Digital products based on artificial intelligence (AI) will play a key role for the Volkswagen Group in the future
• Volkswagen intends to simplify collaboration with tech companies and to make optimum use of the AI sector’s innovation potential
• New “AI Lab” within the Group will act as a globally networked competence center and incubator
• “AI Lab” will identify new product ideas connected with AI and collaborate with tech companies as the need arises

Wolfsburg. In the future, digital products based on artificial intelligence (AI) will play a key role for the Volkswagen Group. New infotainment and navigation applications, high-performance speech recognition, extended vehicle functions and the deep integration of digital ecosystems in the car will bring considerable benefits to customers, enhancing the product experience. This is why Volkswagen has established a specialized “AI Lab”. The company will act as a globally networked competence center and incubator. AI Lab will identify new product ideas for the Volkswagen Group, and coordinate them internally within the Group. As the need arises, this will also include collaboration with the tech sector in Europe, China and North America. By adopting this approach, the Volkswagen Group intends to simplify collaboration with technology companies with a view to making optimum use of the innovation potential and speed of the AI sector. The objective is to rapidly develop digital prototypes and transfer them to the Group brands for implementation.

#Strategy#Innovation#Digitalization#Software

“We want to offer our customers genuine added value with artificial intelligence. We aim to link external digital ecosystems with the vehicle, creating an even better product experience,” says Oliver Blume, CEO of the Volkswagen Group and Porsche AG. “Collaboration with technology companies is crucially important for us. In future, we intend to simplify cooperation in organizational and cultural terms.”

Volkswagen aims to bring AI products to the vehicle and vehicle environment

The Volkswagen Group is committed to continually integrating new digital products with artificial intelligence in its vehicles and offering customers added value going beyond their cars.
Among other items, Volkswagen sees considerable potential in high-performance speech recognition and services that connect users’ own digital environments with the vehicle. Extended vehicle functions will be equally important. These can include AI-optimized charging cycles for electric vehicles, predictive maintenance and the networking of vehicles with infrastructure, such as customers’ own homes (“smart home”).

AI Lab to identify product ideas and rapidly produce prototypes

AI Lab will not manufacture production models, but will serve as an incubator for the Volkswagen Group. The company will identify new product ideas connected with artificial intelligence throughout the world. AI Lab will then develop highly promising concepts together with partners where the need arises, to produce early prototypes. AI Lab will have a team of artificial intelligence experts and will work closely with all the brands. High-ranking representatives of the brand groups will form the Supervisory Board.

AI Lab’s slim and powerful organization and the direct involvement of the brand groups in the Supervisory Board will enable communication among equal partners in the dynamic AI sector, expedite processes and simplify collaboration between the automotive industry and tech companies.

“With our new ‘AI Lab’, we are combining technological expertise, flexibility and speed in collaboration with external partners. This will be crucial in the highly dynamic AI sector,” says Michael Steiner, Head of Research and Development of the Volkswagen Group and Member of the Executive Board, Research and Development of Porsche AG. “We will pursue highly promising initiatives in the marketplace, together with partners where this is necessary, irrespective of existing arrangements and other links in series production.”

Exploratory talks on the first products are already underway with international tech companies.

High-profile team to manage new AI Lab

The Board of Management of AI Lab will include Carsten Helbing as CEO and Carmen Schmidt as CLO & CBO. Recognized artificial intelligence experts will be responsible for technical management functions. The Supervisory Board will consist of members of the Boards of Management of the Volkswagen, Audi and Porsche brands.

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