Majority of Automakers to Pull Back From AI Investments by 2029: Gartner

The automobile industry is investing heavily in AI initiatives, yet many companies are struggling to meet their goals.

A visitor watches an AI sign on an animated screen at the Mobile World Congress in Barcelona, Spain. Josep Lago/AFP via Getty Images

Automakers, by and large, have signaled a major pullback in artificial intelligence (AI) investment in the next few years, moving away from the current surge in spending as they struggle to meet their goals, according to a new report from research and advisory firm Gartner.

In its Predicts 2026: Automotive report, released on Dec. 8, Gartner said that by 2029, only 5 percent of automakers will maintain strong AI-investment growth, far lower than the more than 95 percent currently engaged. The expected pullback stems from high costs, integration challenges, and internal resistance among more traditional automakers.

Gartner analyst Pedro Pacheco said the automotive industry is experiencing “a period of AI euphoria,” with many companies attempting to achieve “disruptive value” without first building strong AI foundations.

“This euphoria will eventually turn into disappointment as these organizations are not able to achieve the ambitious goals they set for AI,” he said in the report.

Gartner added that only a few automakers that focus on AI software development and employ emerging AI technology leaders are likely to stand out in the AI race.

“Software and data are the cornerstones of AI,” Pacheco said. “Companies with advanced maturity in these areas have a natural head start.”

AI is already widely used by U.S. automakers for driver assistance, supply-chain and manufacturing optimization, predictive maintenance, software development, and other applications. Gartner said this AI integration could eventually enable fully autonomous vehicle assembly lines by 2030.

However, achieving their AI goals requires companies to become “digital first” organizations, Pacheco told Reuters. Despite heavy AI investments, many legacy automakers—long known for engineering rather than software expertise—are struggling to catch up with tech-driven rivals such as Tesla.

Companies across many industries are investing heavily in AI, yet a July study by the Massachusetts Institute of Technology found that despite $30–40 billion poured into generative AI, 95 percent of companies saw no financial returns.