Siemens Puts Brussels on Notice: €1 Billion AI Investment Hangs in the Balance

Siemens threatens to redirect industrial AI funds to the US over EU regulations, while shareholders to vote on Healthineers spin-off in 2027.

The message from Siemens' top executive could hardly have been blunter. Speaking at the Hannover Messe, CEO Roland Busch warned that the lion's share of a planned billion-euro investment package for industrial artificial intelligence would be redirected to the United States unless European regulators rethink their approach. "I cannot explain to my shareholders why I would invest money in an environment where I am hindered," Busch said, firing a direct salvo at Brussels.

At the heart of the complaint is a fundamental mismatch. Busch argues that the EU AI Act and the Data Act fail to distinguish between industrial AI applications used in factories and automation systems, and consumer-facing software like chatbots. The result, he contends, is that manufacturing and robotics are lumped into the same regulatory framework as apps, creating unnecessary hurdles for companies like Siemens.

German Chancellor Friedrich Merz has thrown his weight behind the criticism. At the same trade fair, he pledged to push for industrial AI to be carved out of the current EU regulatory regime — a rare instance of a German leader publicly challenging a standing European framework. The European Commission has already offered concessions, proposing to delay rules for high-risk AI systems by up to 16 months and simplify reporting obligations, but Busch dismissed these as insufficient.

A Vote on Healthineers Finally Gets a Date

While the regulatory battle plays out, Siemens has also moved to resolve a long-standing question about its corporate structure. Shareholders will vote on the planned separation of medical technology subsidiary Siemens Healthineers at the ordinary annual general meeting in February 2027 — a timeline that ended months of speculation.

Under the proposal, Siemens will transfer 30 percent of its Healthineers stake directly to its own shareholders via a spin-off under German transformation law. That means Siemens investors would receive Healthineers shares directly into their portfolios. The move would strip Siemens of its controlling majority, reducing its holding to a significant minority stake, with a pure financial investment as the medium-term goal.

The strategic rationale is straightforward: the 67 percent stake in Healthineers offers no operational synergies and contributes to the typical conglomerate discount that weighs on Siemens' valuation. The company has assured shareholders that its progressive dividend policy will continue even after deconsolidation.

One critical question remains unresolved: whether the transfer of Healthineers shares into Siemens shareholders' accounts will be tax-free. Siemens says this will be clarified when full details are presented, but until then, the tax risk is real. If treated as a dividend in kind, it could trigger short-term volatility.

Lithium and Software: Building the Future

Alongside the restructuring and regulatory battles, Siemens is pushing ahead with concrete industrial projects. The company has signed a framework agreement with Vulcan Energy for the Lionheart project in the Upper Rhine Valley — Europe's first fully integrated lithium and renewable energy venture. Siemens will serve as the main automation partner for Vulcan's lithium extraction plants in Landau and Frankfurt, with Vulcan committing to orders of at least €40 million. Siemens Financial Services is also taking an equity stake of €67 million. The project targets an annual capacity of 24,000 tonnes of lithium hydroxide, enough for roughly 500,000 electric vehicle batteries.

On the software front, Siemens has completed the acquisition of Dotmatics, a life sciences R&D software provider, for an enterprise value of $5.1 billion. The deal folds into the Digital Industries software business and marks a targeted expansion of the PLM portfolio into the life sciences market. This follows the earlier acquisitions of Altair and Dotmatics for a combined $15 billion, deepening Siemens' push into simulation and AI applications — areas where software already accounts for more than a third of group revenue.

Stock Performance and What's Next

Siemens shares were trading at €243.70, roughly 14 percent above their level a month ago and up 27 percent over the past twelve months. The stock has been buoyed by the restructuring narrative and the AI investment story, though trade tensions and a sluggish Chinese market remain headwinds.

The next major test comes in May, when Siemens reports second-quarter results — the first quarterly report under new CFO Veronika Bienert, who took over from Ralf Thomas at the start of April. That report will offer the clearest picture yet of how tariff pressures and the regulatory uncertainty in Europe are hitting the bottom line.