Industrial Software: AI's Impact on Industrial Software
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UBS partnered with industry analyst firm Cambashi to examine the impact of artificial intelligence on the $26 billion industrial software sector. While skill shortages continue to challenge the industry, historical data suggests that innovation primarily enhances labor productivity rather than replacing it entirely. Currently, Oxford Economics data has yet to show significant productivity gains directly attributable to AI adoption.
At the ASSESS Simulation Summit, enthusiasm centered on the democratization of Computer-Aided Engineering tools. AI could expand CAE accessibility from roughly one million specialists to 14 million engineers and nine million technicians globally. AI is expected to accelerate design workflows by enabling tighter coupling of mechanical and electronic designs and facilitating multi-physics simulations. However, liability concerns regarding AI-driven designs remain a barrier in heavily regulated industries like aerospace and medical technology.
Incumbent software providers hold a distinct advantage in highly technical niches. Deeply embedded customer workflows, established trust, and complex data governance make switching to AI-native alternatives difficult. Historically, new entrants in electronic design automation and CAE are frequently acquired, maintaining high industry consolidation. Consequently, UBS believes vendors equipped with both EDA and CAE capabilities, such as Keysight, Siemens, and Synopsys, are uniquely positioned to deliver continued innovation and capture market share.