A key policy goal of President Donald Trump’s administration is bringing jobs back to American factories, though the effort has been mired in a years-long slog despite support from both Democratic and Republican administrations.
But even beyond the challenge of getting large, multinational companies to reroute their complex supply chains, there’s a large and unsolved skills gap problem to address even if these U.S. manufacturing jobs were to proliferate. Peter Koerte, the chief technology officer and chief strategy officer at German technology conglomerate Siemens AG, points to research that shows that the average tenure of a U.S. manufacturing worker has slipped from 20 years in 2019 to just 3 years in 2023.
“Which means that most of the people that you find—and in particular if we want to bring back manufacturing to the United States—they’re unskilled,” says Koerte. “Because nobody wants to have a factory job.”
Official government figures are less dire, with the Bureau of Labor Statistics reporting that the median tenure of a manufacturing worker dropped from 5.9 years in 2014 to 4.9 years a decade later. But regardless, manufacturing workers are coming to work each day with a lot less expertise than those who worked similar jobs decades ago.
This led Siemens to launch a pilot program in 2024 for an industrial-focused AI copilot, helping engineering teams to search Siemens manuals in natural language to troubleshoot problems on the factory floor. This year, the company expanded the effort by launching an industrial foundational model that was specifically designed for industrial applications.
As an example, this AI tool can be used by a worker who is trying to figure out what to do when a machine breaks down. The employee can input information about the machine and the error code that’s on display, and then retrieve detailed instructions on how to address the issue. Less downtime for machines saves factories time and money. The use of AI in this manner also democratizes engineering expertise.
“You don’t need to have the very deep domain know-how that prevents you from using those systems,” says Koerte. “It levels the playing field.”
Koerte has had a long career at Siemens, joining the company in 2007 as a corporate strategist and taking on several leadership roles before ascending to the CTO and CSO titles in 2020. He says he’s remained at Siemens for such a large portion of his career because he’s inspired by the company’s ability to continually reinvent itself over its 178-year history.
Siemens began as a telecommunications company that built the infrastructure that made it possible to send a telegram from London to Calcutta in just 28 minutes, a momentous breakthrough in the mid-1800s. Today, Siemens is known for selling machinery and software that support massive industries including the power and gas sectors, healthcare, and building and freight projects, ranging from supporting a 2,000-kilometer high-speed railway that’s being built in Egypt to an automotive Mercedes-Benz plant in Berlin. The advancement of generative AI presents yet another opportunity for reinvention, says Koerte.
Koerte says Siemens was an early adopter of more traditional forms of AI that have been used for many years in manufacturing, including to perform quality inspections or to ensure that buildings are using energy as efficiently as possible. Before the generative AI boom kicked off in late 2022, Siemens had more than 1,500 AI experts on staff.
Along that journey, Siemens has embraced a wide variety of AI partners, including heavy hitters like Nvidia and Amazon Web Services, as well as European-based AI companies and large language model makers in China. Microsoft has been an especially critical partner, Koerte says, offering engineering expertise and insights into how to commercialize the company’s industrial AI offerings.
Software development ranks as a high priority use case for generative AI. The company’s software developer workforce of about 27,000 employees have been using AI coding assistants like GitHub Copilot and the productivity lift from those tools ranges between 10% to 30%, says Koerte.
Across the broader workforce, there are 460 distinct AI use cases in production today, a figure that excludes the unique AI chatbots that workers can create to perform tasks through a secure system that’s called SiemensGPT. In total, over 15,000 unique bots have been created by Siemens employees since October 2024.
“We have it pretty much everywhere,” says Koerte of AI’s pervasiveness. “The question is, how much have we saved?”
That’s not yet completely resolved and most surveys of CTOs and chief information officers show that the return on investment for generative AI projects isn’t as clear as they’d like it to be. But Siemens has set a north star goal. Before the influence of generative AI, the company had an annual productivity gain target of 3% to 4% across the business. But Koerte says with AI, the hope is to double that aspirational range.
He believes that parts of the economy that have big skills gaps will reap the most benefits of AI. When Siemens launched an AI-enabled assistant tool to help radiologists detect diseases, the greatest adoption came from underdeveloped countries where there were far fewer specialists.
“You always have to look at necessity, where the biggest challenge and necessity is,” says Koerte. “Because then people have to look at it differently. And they have to change.”
John Kell
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NEWS PACKETS
AI’s expensive talent war heats up. Google, Meta, and OpenAI are among the AI hyperscalers throwing big bucks to lure lucrative AI talent, as highlighted by Google’s $2.4 billion deal to hire the leaders of AI coding tool Windsurf and pay for the nonexclusive license for the startup’s technology. Days later, Cognition swooped in to buy the rest of Windsurf, though terms of the deal weren’t disclosed. OpenAI was also reportedly in talks with Windsurf, discussions that broke down because of concerns about having to share its products with Microsoft, OpenAI’s biggest investor. Separately, OpenAI has lured four top engineers from rivals Tesla, xAI, and Meta; while Bloomberg reports of a $200 million pay package that was given to former Apple engineer Ruoming Pang, who ran the company’s AI models team. Meta has also recently hired more than 10 OpenAI researchers and experts from Anthropic, Google, and other startups, the news outlet reports.
AI has an impact on jobs, but just how much? Over the past week, job cuts continued to be attributed to the gains companies are achieving from their investments in AI, with a report from Bloomberg highlighting internal comments from within Microsoft that says AI has saved the tech giant more than $500 million in its call centers alone. Microsoft has also cut about 15,000 employees this year. Meanwhile, roughly 1,300 jobs were cut at job search and employee review companies Indeed and Glassdoor, as parent company Japan’s Recruit Holdings told employees that AI is “changing the world” and that the company must adapt with the evolution of that technology. But CIO Dive reports that outplacement firm Challenger, Gray & Christmas’ figures for the first half of 2025 found that only 75 out of 20,000 jobs cut by U.S.-based companies were explicitly attributed to AI (though it notes that the cause of many layoffs may be classified in broader terms). The trade outlet reports that companies are using the term “technological update” more frequently, possibly to avoid negative press of replacing workers with AI.
Nvidia hits $4 trillion valuation ahead of CEO’s trip to China. The AI chip maker became the world’s first publicly traded company to hit a $4 trillion market capitalization last week, reflecting an astonishing gain of 1,460% over the past five years. The latest stock market milestone comes as Nvidia CEO Jensen Huang finds himself quite a bit in the news over the past several days, culminating with Monday’s news that the U.S. government has lifted restrictions on Nvidia selling its H20 GPUs to China. Huang also recently sat down with CNN, where he was asked about a warning from Anthropic CEO Dario Amodei that AI could eliminate 50% of entry-level white collar jobs within five years. “If the world runs out of ideas, then productivity gains translates to job loss,” says Huang.
Meanwhile, struggling chip maker Intel lays off 4,000. Nvidia’s rival Intel, which has lagged in the AI chips race, announced layoffs across four states affecting engineers, researchers, middle management, and factory workers. Last week, The Oregonianreported that new CEO Lip-Bu Tan told employees during an internal broadcast, in response to a question about company culture, that things had gotten so bleak that Intel was “not in the top 10 semiconductor companies.” He added that customers were giving Intel poor marks and cautioned that a turnaround would be a “marathon” that would require some humility. Intel’s market capitalization greatly lags Nvidia at just around $100 billion today.
ADOPTION CURVE
AI agents are proliferating and most companies prefer a mix of internal and off-the-shelf solutions. KPMG’s second-quarter AI pulse survey found that nine out of ten companies are past AI agent experimentation, with 33% fully deploying at least some agents (up from 11% for the past two consecutive quarters), with another 57% of organizations piloting AI agents. “All agents aren’t created equal,” cautions Todd Lohr, head of ecosystems at KPMG, in an interview with Fortune. “You’re seeing a lot of task agents being deployed, which are more simplified use cases.”
With more organizations moving to the piloting or deployment stages, Lohr says the obstacles to make AI agents a reality are becoming more clear, including technical skills gaps (59% surveyed), followed by workforce resistance to change (47%), and system complexity (39%).
When it comes to how companies are actually deploying these agentic workflows—which can perform more complex tasks than prompt-based AI chatbots—the Big Four accounting firm says more leaders are planning to deploy a combination of internally built and off-the-shelf agents (up 51% from 27% in the first quarter). Just 2% plan to only build agents internally.
Courtesy of KPMG
JOBS RADAR
Hiring:
– EchoStar is seeking a CIO, based in Englewood, Colorado. Posted salary range: $400K-$500K/year.
– Rothy’s is seeking a CTO, based in San Francisco. Posted salary range: $350K-$425K/year.
– Macon-Bibb County is seeking a CIO, based in Macon, Georgia. Posted salary range: $120K-$180K/year.
– Ahold DelhaizenamedJan Brecht as CTO and a member of the grocery store retailer’s executive committee, effective September 26. He will succeed Ben Wishart, who is leaving the company after 12 years in the CTO role. Brecht most recently served as chief digital information officer at Nissan Motor and previously served as CIO at Mercedes-Benz Group and CIO at Adidas Group.
– QXOappointedEric Nelson as CIO, effective July 14, joining the building products distributor from food giant Kraft Heinz, where he spent a decade in senior technology roles, including most recently as VP and head of IT functional capabilities. Nelson also previously served as CIO of Kraft Heinz North America and global head of analytics. Earlier in his career, he worked for British confectionary company Cadbury.
– SharkNinja announced the appointment of Mike Harris as chief innovation and technology officer, joining the consumer electronics company after most recently serving as chief product officer for Amazon’s Ring and Blink units. Prior to his work at Amazon, Harris’ past experiences include founding Ravisent Technologies, serving as CEO of Zonoff, and leading connected devices at DivX.
– RxLogic namedWilliam Figueroa as chief information and technology officer, joining the pharmacy benefit management (PBM) technology provider after most recently serving as CITO for cancer center operator Integrated Oncology Network, which was acquired by Cardinal Health. Figueroa also previously served as CIO of mortgage lender Nations Lending.
– 66degrees appointedBrian Gregory as CTO, joining the AI, data, and cloud consultancy after eight years at Google Cloud, where he led global strategic partnerships spanning across parent company Alphabet. Previously, he served as a senior director of IT for PBM Express Scripts and held technology leadership roles at Peabody Energy and CenturyLink.
– Blink Charging, an electric vehicle charging equipment operator, announced the acquisition of charging infrastructure firm Zemetric and named that company’s founder, Harmeet Singh, as the new CTO of the combined organization. Prior to founding Zemetric, Singh worked as a head of product for energy company Shell and prior to that, CTO of charging company Greenlots, which Shell acquired in 2019.
Netflix Inc.’s $72 billion acquisition of Warner Bros. Discovery Inc. includes one of the biggest breakup fees of all time — a $5.8 billion penalty that Netflix has agreed to pay its target if the deal falls apart or fails to win regulatory approval.
At 8% of the deal’s equity value, the fee is well above the average even in big-ticket dealmaking, signaling Netflix executives’ confidence they can convince global antitrust watchdogs to let the transaction go ahead. The average breakup fee in 2024 was equal to about 2.4% of the total transaction value, according to a report from Houlihan Lokey.
Netflix’s multibillion-dollar pledge is also a sign of how heated the bidding war got for control of the iconic Hollywood studio. As part of a sweetened proposal earlier this week, rival suitor Paramount Skydance Corp. had more than doubled the proposed breakup fee in its offer to $5 billion.
Warner Bros., meanwhile, would have to pay a $2.8 billion reverse breakup fee if its shareholders vote down the deal. If Warner Bros. were to accept a rival offer, the new buyer, in effect, would be on the hook for that fee.
Here are some of the biggest breakup fees in M&A history, according to data compiled by Bloomberg:
AOL/Time Warner Inc.
Deal value: $160 billion
America Online Inc. agreed to pay a fee of about $5.4 billion if it backed out of its agreement to buy Time Warner Inc. Time Warner would pay about $3.9 billion if it broke up the transaction under certain conditions.
The breakup fee could have been as high as $3.5 billion, but the merger had a contingency that it would be lower if there were changes to tax law. Pfizer ended up paying just $150 million after the US cracked down on corporate tax inversions
Percentage of deal value: 2.2% (but paid less than 0.1%)
Breakup Fee: This deal for Vodafone’s stake in Verizon Wireless was complicated. Verizon promised to pay a breakup fee to Vodafone of $10 billion if it couldn’t get financing for the deal, or $4.64 billion if its board changed its recommendation to shareholders to vote in favor of the transaction. Meanwhile, Vodafone would have owed $1.55 billion to Verizon if its board changed its mind, and either side would have had to pay $1.55 billion to the other if shareholders turned down the transaction. Vodafone also would have had to pay that $1.55 billion if an unfavorable tax ruling made it too onerous to complete the deal.
Breakup fee: AB InBev agreed to pay a breakup fee of $3 billion if it failed to get approval from regulators or shareholders and instead walked away from what was then the biggest corporate takeover in UK history.
Breakup fee: AT&T agreed to pay Deutsche Telekom a $3 billion breakup fee in cash, as well as transferring radio spectrum to T-Mobile and striking a more favorable network-sharing agreement.
The Netflix Inc. plans that clinched the deal for Warner Bros. Discovery Inc. started to shape up around Thanksgiving.
A deadline was looming: Warner Bros. had asked bidders, which also included Paramount Skydance Corp. and Comcast Corp., to have their latest proposals and contracts in by the Monday after the holiday, following a round about a week earlier. The suitors were told to put their best foot forward.
While most Americans were watching football and feasting on turkey, Netflix executives and advisers hunkered down to finalize a binding offer and a $59 billion bridge loan from banks, one of the biggest of its kind. That gave the streaming company the ammunition to make a mostly cash-and-stock bid that helped it prevail over Comcast and David Ellison’s Paramount, according to people familiar with the matter.
The resulting $72 billion deal, announced Friday, is set to bring about a seismic shift in the entertainment business — if it can survive intense regulatory scrutiny and a potential fight from Paramount. This account of Netflix’s surprise victory in the biggest M&A auction of the year is based on interviews with half a dozen people involved in negotiations. They asked not to be identified because the details are confidential.
The sales process had kicked off with several unsolicited bids from Paramount Skydance, itself a newly formed company after a merger this year orchestrated by Ellison. He’s now the studio’s chief executive officer and controlling shareholder, with backing from his father, Oracle Corp. billionaire Larry Ellison.
Paramount’s early move gave it a head start in the bidding process weeks before other would-be buyers got access to information. But the post-Thanksgiving deadline for second-round bids became a turning point by giving Netflix time to catch up and assemble the documents it needed, some of the people said. And since the streaming giant was bred in the fast-paced ethos of Silicon Valley, it could move quickly.
When the binding bids arrived that Monday, Netflix’s offer emerged as superior, the people said.
One issue was the Warner Bros. camp had doubts about how Paramount would pay for the company, which owns sprawling Hollywood studios, the HBO network and a vast film and TV library. Paramount’s offer included financing from Apollo Global Management Inc. and several Middle Eastern funds, and it had conveyed that its bid was fully backstopped by the Ellisons. Still, Warner Bros. executives were privately concerned about the certainty of the financing, people familiar with the matter said.
Representatives for Netflix and Warner Bros. declined to comment.
‘Noble’ vs ‘Prince’
In the weeks leading up to the finale, Warner Bros. advisers set up war rooms at various hotels in midtown Manhattan. A core group holed up at the Loews Regency, which has long been a convening spot for the city’s movers and shakers.
Inside Warner Bros., the situation was known as “Project Sterling.” The company called itself by the code name “Wonder.” The team referred to Netflix as “Noble,” while Paramount was “Prince” and Comcast was “Charm.”
At Netflix, Chief Financial Officer Spencer Neumann served as the point man while corporate development head Devorah Bertucci organized people day-to-day. Chief Legal Officer David Hyman and Spencer Wang, vice president of finance, investor relations and corporate development, also were key architects, with all of them reporting into co-CEOs Ted Sarandos and Greg Peters.
The contours of the deal were shaped in a way befitting of a tech company: mostly over video chat or phone rather than in person. Virtual war rooms were set up. While strategizing or discussing diligence on Zoom, participants would raise virtual hands or make suggestions over chat rather than unmuting and slowing down the meeting. Google Docs were used to review and edit documents together in real time.
Talks heated up this week, with Warner Bros. advisers in continuous dialogue with the bidders and negotiating contract language and value. Comcast said it would merge its NBCUniversal division with Warner Bros. Paramount offered to more than double its proposed breakup fee to $5 billion to sweeten its deal and outshine rivals.
In the end, Warner Bros. determined Netflix had the best offer and the company was the most flexible on key terms. On Wednesday, Paramount lobbed an aggressively worded letter to Warner Bros. board saying the sales process was “tainted.” It also identified what it saw as regulatory risks in the Netflix proposal, one sign that a winning outcome was slipping away for Paramount.
Netflix found out Thursday evening New York time that it had won. Executives and advisers were assembled on a video call when they got the official word, sparking a moment of jubilation before everyone snapped into action. By 10:25 p.m., Bloomberg News broke the news that a deal was imminent.
Even Sarandos made it sound like the ending was a twist on a conference call with investors. “I know some of you are surprised that we’re making this acquisition, and I certainly understand why,” he said. “Over the years, we have been known to be builders, not buyers.”
Regardless of whether Paramount reemerges to try and top the bid, Netflix will have work ahead of it. It has agreed to pay a $5.8 billion breakup fee to Warner Bros. if the transaction fails on regulatory grounds. The company also has to digest its largest acquisition ever.
“It’s going to be a lot of hard work,” co-CEO Peters said on the conference call. “We’re not experts at doing large-scale M&A, but we’ve done a lot of things historically that we didn’t know how to do.”
Massachusetts’ highest court heard oral arguments Friday in the state’s lawsuit arguing that Meta designed features on Facebook and Instagram to make them addictive to young users.
The lawsuit, filed in 2024 by Attorney General Andrea Campbell, alleges that Meta did this to make a profit and that its actions affected hundreds of thousands of teenagers in Massachusetts who use the social media platforms.
“We are making claims based only on the tools that Meta has developed because its own research shows they encourage addiction to the platform in a variety of ways,” said State Solicitor David Kravitz, adding that the state’s claim has nothing to do the company’s algorithms or failure to moderate content.
Meta said Friday that it strongly disagrees with the allegations and is “confident the evidence will show our longstanding commitment to supporting young people.” Its attorney, Mark Mosier, argued in court that the lawsuit “would impose liabilities for performing traditional publishing functions” and that its actions are protected by the First Amendment.
“The Commonwealth would have a better chance of getting around the First Amendment if they alleged that the speech was false or fraudulent,” Mosier said. “But when they acknowledge that its truthful that brings it in the heart of the First Amendment.”
Several of the judges, though, seem to more concerned about Meta’s functions such as notifications than the content on its platforms.
“I didn’t understand the claims to be that Meta is relaying false information vis-a-vis the notifications but that it has created an algorithm of incessant notifications … designed so as to feed into the fear of missing out, fomo, that teenagers generally have,” Justice Dalila Wendland said. “That is the basis of the claim.”
Justice Scott Kafker challenged the notion that this was all about a choose to publish certain information by Meta.
“It’s not how to publish but how to attract you to the information,” he said. “It’s about how to attract the eyeballs. It’s indifferent the content, right. It doesn’t care if it’s Thomas Paine’s ‘Common Sense’ or nonsense. It’s totally focused on getting you to look at it.”
Meta is facing federal and state lawsuits claiming it knowingly designed features — such as constant notifications and the ability to scroll endlessly — that addict children.
In 2023, 33 states filed a joint lawsuit against the Menlo Park, California-based tech giant claiming that Meta routinely collects data on children under 13 without their parents’ consent, in violation of federal law. In addition, states including Massachusetts filed their own lawsuits in state courts over addictive features and other harms to children.
Newspaper reports, first by The Wall Street Journal in the fall of 2021, found that the company knew about the harms Instagram can cause teenagers — especially teen girls — when it comes to mental health and body image issues. One internal study cited 13.5% of teen girls saying Instagram makes thoughts of suicide worse and 17% of teen girls saying it makes eating disorders worse.
Critics say Meta hasn’t done enough to address concerns about teen safety and mental health on its platforms. A report from former employee and whistleblower Arturo Bejar and four nonprofit groups this year said Meta has chosen not to take “real steps” to address safety concerns, “opting instead for splashy headlines about new tools for parents and Instagram Teen Accounts for underage users.”
Meta said the report misrepresented its efforts on teen safety.
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Associated Press reporter Barbara Ortutay in Oakland, California, contributed to this report.
Politics8 years ago