Siemens threatens to shift AI investment to the US and China over EU regulation

Siemens AG has issued the European Union an ultimatum: soften AI regulation, or Germany's largest industrial conglomerate will redirect its artificial intelligence investments toward the US and China. CEO Roland Busch said so openly. The warning comes as the debate over Europe's economic competitiveness in the AI era reaches a critical point.

This is more than corporate grumbling. Siemens invests billions of euros every year in digitalization and industrial AI, and its stance reflects a widening rift between Europe's technological ambitions and the regulatory climate the EU actually creates for business. With revenue of more than 77 billion euros, the company is one of the region's largest employers and taxpayers, so its warning carries weight.

The European AI Act — the world's first comprehensive law on artificial intelligence — takes effect in phases from 2024 to 2027. The law sorts AI systems by risk level, from outright banned practices to high-risk applications in industry, healthcare, and transportation. High-risk systems must meet strict transparency requirements and undergo mandatory audits and multi-stage certification. That section is what frustrates Siemens most.

The company is actively building AI into its products: manufacturing automation systems, smart power grids, medical diagnostic equipment, and digital twins of factories. Most of these fall into the AI Act's high-risk category. That means extra compliance costs, lengthy approval procedures, and a real risk of falling behind US and Chinese competitors who aren't burdened by similar requirements.

The US and China offer a stark contrast. The American administration has steadily rolled back restrictive AI initiatives and declared a course toward technological dominance without excessive regulatory pressure on business. China, despite its own requirements for AI systems, gives industrial companies access to a vast domestic market, large-scale state support for R&D, and a fast pace of adoption. Against this backdrop, Europe's approach looks like a structural competitive disadvantage.

Siemens isn't the first company to publicly criticize the AI Act. Meta, several Scandinavian tech companies, and European AI startups have voiced similar positions, warning of a risk of technological emigration. Volkswagen, BASF, and other industrial groups have also pointed to the regulatory burden as a factor that makes Europe less attractive for investment.

Busch framed the company's position bluntly and pragmatically: Siemens will invest where it makes economic sense. If the EU doesn't create conditions comparable to those its competitors offer, capital and expertise will move to where they're welcome.

For Europe, this is a critical signal. Industrial AI isn't about chatbots; it's about the real competitiveness of manufacturing, healthcare, and energy. If Siemens follows through on its threat, the precedent will set off a chain reaction. European regulators will have to strike a balance between protecting citizens from AI risks and keeping the region attractive for tech investment — and so far, that balance clearly hasn't been found.

*Meta is designated an extremist organization and banned in Russia.