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“AI in Manufacturing: Securing American Leadership in Manufacturing and the Next Generation of Technologies”

House Committee on Energy and Commerce, Commerce, Manufacturing, and Trade Subcommittee

February 12, 2025 (recording linked here)

HEARING INFORMATION

Witnesses and Written Testimony (linked):

• Ms. Barbara Humpton: President and CEO, Siemens Corporation

• Mr. Jason Oxman: President and CEO, Information Technology Industry Council (ITI)

• Mr. Jeff Kinder: Executive Vice President, Product Development and Manufacturing Solutions, Autodesk 

• Dr. Elisabeth B. Reynolds: Professor of Practice, Massachusetts Institute of Technology 

HEARING HIGHLIGHTS

IN THEIR WORDS

SUMMARY OF OPENING STATEMENTS FROM THE COMMITTEE AND SUBCOMMITTEE

• Chairman Bilirakis emphasized the importance of artificial intelligence in revolutionizing American manufacturing, strengthening supply chains, and enhancing productivity, while also recognizing the need for legislative action to ensure resilience in critical industries.

• Ranking Member Schakowsky highlighted past legislative successes in consumer protection, particularly regarding children’s safety and privacy, but noted that more work is needed to hold big tech accountable. She emphasized concerns over AI’s impact on American workers, stressing the need to ensure that technological advancements do not leave ordinary people behind. She also voiced disappointment over the weakening of the Consumer Financial Protection Bureau, which had previously returned billions to consumers, and called for stronger consumer protections.

• Chairman Guthrie shared a personal story about his family’s experience with manufacturing job losses, emphasizing the real-world consequences of economic disruptions. He stressed the importance of AI in making American manufacturing more competitive and productive, particularly against global competitors like China. He advocated for improving workforce skills so that employees can effectively integrate AI into manufacturing processes, ultimately lifting wages and strengthening the middle class.

• Vice Chairman Fulcher underscored the crucial role of manufacturing in the U.S. economy, noting that China currently leads in global manufacturing output. However, he argued that the U.S. can outcompete China by fully leveraging its technological innovations and workforce. He emphasized the need for AI to enhance production efficiency, predict machine failures, and improve worker safety while ensuring privacy and responsible government involvement in workforce development.

• Ranking Member Pallone expressed frustration that the committee was not addressing concerns over the Trump administration granting Elon Musk and his associates access to government systems containing sensitive personal data. He warned that Musk’s team could access, modify, or transfer healthcare and financial records of millions of Americans, including seniors, in violation of long-standing privacy protections. He criticized Republicans for remaining silent on the issue and called for congressional action to protect Americans' personal information. He then turned to the topic of manufacturing, highlighting the importance of a strong domestic industrial base and condemning efforts to divert federal resources meant to modernize U.S. manufacturing, arguing that such actions jeopardize economic growth and national security.

SUMMARY OF WITNESS STATEMENT

• Mr. Oxman emphasized that AI is essential for the future of American manufacturing, contributing to increased efficiency, productivity, and innovation. He highlighted how AI-driven predictive maintenance, supply chain optimization, and digital twinning are improving manufacturing processes. He called for policies that foster AI growth, including competitive tax incentives, a skilled AI workforce, expanded access to federal data, and private-public partnerships. He urged Congress to remove barriers to global competition and support AI-driven manufacturing to maintain U.S. leadership in the industry.

• Dr. Reynolds stressed the urgency of rebuilding the U.S. industrial base through AI and advanced manufacturing technologies, noting bipartisan government investments that have significantly increased manufacturing spending. She outlined key priorities, including encouraging AI adoption by small and medium-sized enterprises (SMEs), investing in workforce training, and expanding research and development in emerging manufacturing technologies. She warned that the U.S. must address its manufacturing workforce shortage and develop new financing models to help scale up industrial innovations. She concluded by urging Congress to act swiftly to strengthen the nation’s manufacturing sector.

• Mr. Kinder described how AI is transforming the manufacturing industry by increasing efficiency and reducing tedious tasks. He shared examples of AI-driven innovations, including optimizing race car components, automating design tasks, and accelerating CNC machine programming. He emphasized the importance of democratizing access to AI for small and medium-sized manufacturers, ensuring they have the same technological advantages as large corporations. He recommended tax credits, workforce training initiatives, and collaboration between tech companies and manufacturers to drive AI adoption and maintain U.S. manufacturing competitiveness.

• Ms. Humpton highlighted Siemens’ role in pioneering industrial AI and its impact on American manufacturing. She explained how AI-driven predictive maintenance and real-time data analysis are enhancing productivity and innovation in sectors such as automotive, aerospace, and energy. She reassured the committee that AI would not replace workers but instead create new opportunities by making technology more accessible. She provided an example of Siemens’ new factory in Texas, which used AI to streamline production, create jobs, and train workers with no prior manufacturing experience. She concluded by urging policymakers to support industrial AI to drive economic growth and strengthen U.S. manufacturing leadership.

SUMMARY OF Q and A

• Vice Chairman Bilirakis asked how AI in manufacturing differs from generative AI. Ms. Humpton explained that industrial AI operates in controlled environments using data from sensors, which manufacturers prefer to keep private. She emphasized that AI helps improve manufacturing efficiency by enhancing quality control, citing an example of AI identifying defects in automotive doors that would be difficult for the human eye to detect.

  The Vice Chairman asked for specific examples of AI applications that contribute to manufacturing efficiency. Mr. Oxman highlighted Ericsson’s 5G smart factory in Texas, which uses AI-powered predictive maintenance, autonomous robots for dangerous tasks, and process automation. He noted that AI has resulted in a 120% improvement in output per employee and a 65% reduction in manual material handling.

  Vice Chairman Bilirakis asked about cybersecurity measures for AI in manufacturing. Mr. Kinder stated that Autodesk prioritizes cybersecurity through a strategy of "build secure, run secure, and stay secure," which includes integrating security measures into software development, implementing identity and encryption controls, and continuously monitoring for vulnerabilities.

• Ranking Member Schakowsky asked how to increase women’s participation in manufacturing. Dr. Reynolds noted that women make up only 30% of the manufacturing workforce despite earning higher wages in the field. She suggested that emphasizing the technological advancements in modern manufacturing and increasing workplace flexibility could help attract more women.

  Ranking Member Schakowsky asked whether AI threatens manufacturing jobs. Dr. Reynolds acknowledged that technology has historically displaced workers but argued that AI can augment jobs by reducing tedious tasks and guiding workers with fewer skills. She emphasized that AI should be developed as a tool that enhances workforce capabilities rather than replaces jobs.

• Vice Chairman Fulcher asked how AI-driven industrial co-pilots will evolve. Ms. Humpton described how AI allows workers to communicate with machines using natural language, making technology more accessible. She shared an example of programming factory robots using text commands instead of complex coding and stated that verbal interaction with AI is already in use.

  The Vice Chairman asked for recommendations on AI-related workforce re-skilling. Mr. Oxman advocated for public-private partnerships to expand STEM education and retraining programs. He cited examples of ITI members working with community colleges and data center investments requiring skilled workers.

  Vice Chairman Fulcher asked about interoperability standards in AI manufacturing. Mr. Kinder explained that interoperability ensures seamless data sharing across different software applications, improving AI training and optimizing manufacturing processes.

• Rep. Castor asked whether the recent federal policy changes have disrupted manufacturing investments. Dr. Reynolds expressed concern that halting federal grants and loans has caused uncertainty, putting over 400 clean energy projects at risk. She warned that these policy shifts could lead to foreign countries, including China, capitalizing on lost U.S. investments.

  Rep. Castor commented that disruptions in manufacturing investments benefit China and urged continued support for advanced manufacturing initiatives.

• Rep. Harshbarger asked whether Siemens’ AI training is available to all employees or just advanced engineering staff. Ms. Humpton stated that AI training is accessible to all Siemens employees through a learning platform that customizes recommendations based on the learner’s knowledge level. She added that Siemens is working on making this training publicly available so that anyone interested can learn about AI technologies.

  Rep. Harshbarger asked for additional examples of AI-driven predictive maintenance in manufacturing. Ms. Humpton explained that predictive maintenance uses various sensors to detect subtle changes in machines, such as vibrations or sound variations, which human workers might not notice. She emphasized that AI helps identify potential failures early, allowing manufacturers to prevent breakdowns while still requiring human oversight.

  Rep. Harshbarger asked what regulatory considerations the administration should include in its AI action plan to benefit American manufacturing. Mr. Oxman welcomed President Trump’s executive order on AI and emphasized the importance of public-private partnerships in shaping regulatory frameworks. He warned against adopting overly restrictive regulations, as seen in Europe, which could hinder U.S. AI leadership and innovation.

  Rep. Harshbarger asked how AI is used in healthcare manufacturing to improve supply chain resilience. Mr. Kinder explained that Autodesk software helps pharmaceutical companies design and optimize their factories, ensuring an efficient production and packaging process. He shared an example of a company saving $350 million annually by using AI-driven digital twin models to enhance space allocation, resource management, and energy efficiency.

  Rep. Harshbarger asked how Autodesk managed to get an AI-designed lightweight brake pedal approved for NASCAR specifications. Mr. Kinder assured her that the brake pedal met all required specifications and successfully passed NASCAR’s technical inspections.

• Rep. Soto commented on the success of the CHIPS Act and Inflation Reduction Act in boosting manufacturing in Florida but expressed concern over President Trump’s freeze order affecting these investments. Ms. Humpton affirmed the importance of continued investment in clean energy and AI-driven manufacturing, emphasizing that industrial AI makes businesses more efficient and globally competitive. She highlighted the private sector’s commitment to sustainability and innovation, driven by federal incentives.

• Rep. Obernolte asked how Congress can create a regulatory environment that supports AI in manufacturing. Mr. Oxman advocated for strengthening public-private partnerships, particularly in AI research and workforce training, rather than imposing heavy regulations. He pointed to congressional initiatives such as the National AI Research Resource and the CREATE AI Act as effective ways to promote innovation.

  Rep. Obernolte asked for feedback on the AI Task Force report’s recommendations for regulating AI in manufacturing. Mr. Oxman praised the report for emphasizing the risks of excessive regulation, global competition, and workforce development. He suggested that Congress focus more on energy-related challenges, particularly for AI-driven data centers, which have become a pressing issue.

  Rep. Obernolte asked whether industrial AI should be regulated differently from consumer AI. Ms. Humpton stressed that industrial AI operates in a controlled environment with curated data, making it distinct from consumer AI. She cautioned against a one-size-fits-all regulatory approach and encouraged clear definitions to address trust and risk appropriately.

• Rep. Clarke asked what steps Congress should take to ensure stability and continued growth in the semiconductor industry. Dr. Reynolds emphasized the importance of following through on CHIPS Act funding and maintaining federal support for semiconductor manufacturing. She highlighted the momentum at both federal and state levels and warned that instability or policy reversals could jeopardize U.S. leadership in the sector.

  Rep. Clarke commented on the successes of U.S. semiconductor investments and urged Congress to maintain long-term commitments to support domestic manufacturing.

• Rep. James asked about Siemens’ reliance on suppliers and the impact of R&D tax credits on their survival. Ms. Humpton explained that Siemens has localized its supply chain across 40 states and emphasized the growing trend of manufacturing closer to demand. She stressed that R&D tax credits are essential to making the U.S. a net exporter of innovation.

  Rep. James asked how Siemens’ digital twin technology is helping address bottlenecks in the defense industrial base. Ms. Humpton described Siemens’ work on the Navy’s shipyards, where AI-driven digital twin models help reduce maintenance time and optimize repair processes. She noted that initial assumptions about bottlenecks were incorrect, and AI prevented billions of dollars from being spent on ineffective solutions.

  Rep. James asked Mr. Oxman about the need for permitting reform and regulatory adjustments to support AI-driven data center energy needs. Mr. Oxman highlighted that data centers power the AI revolution and require an "all of the above" energy strategy. He pointed to permitting delays at the local, state, and county levels as a major obstacle and called for reforms to ensure sufficient energy supply.

• Rep. Dingell expressed concern about the new administration’s approach to manufacturing and supply chain policy, warning against disruptions to past bipartisan efforts. Mr. Kinder emphasized the importance of bipartisan supply chain legislation, particularly for small and medium-sized manufacturers, which play a crucial role in economic stability and job creation.

  Rep. Dingell asked about the role of labor in the future of advanced manufacturing. Dr. Reynolds stressed that manufacturing jobs are vital to economic growth, providing stability and career opportunities. She argued that AI should be leveraged to augment workers’ skills rather than replace jobs, ultimately improving productivity and wages.

• Rep. Fry asked whether fragmented AI regulations across different jurisdictions create challenges for manufacturers. Ms. Humpton confirmed that regulatory inconsistencies require significant resources to track and comply with, making it essential for Congress to collaborate with industry to craft effective policies.

  Rep. Fry asked about balancing AI regulations with national security concerns. Mr. Oxman criticized the AI diffusion rule issued at the end of the Biden administration, arguing that it could hinder U.S. innovation. He expressed hope that the Trump administration would revise the rule to maintain global AI leadership while protecting national security.

  Rep. Fry asked about the biggest AI-related challenges for small and medium-sized enterprises (SMEs). Mr. Kinder cited global competition, high switching costs, and limited access to capital as key challenges. He urged Congress to consider tax credits and incentives to help SMEs invest in AI and digital transformation.

  Rep. Fry asked how Autodesk ensures AI safety and prevents bias. Mr. Kinder explained that Autodesk trains AI models on highly specific manufacturing data rather than large, publicly sourced datasets, reducing the risk of bias.

• Rep. Veasey commented on Dallas-Fort Worth’s role in AI-driven manufacturing and raised concerns about AI’s risks, particularly in the absence of strong protections. Dr. Reynolds agreed that cybersecurity threats have escalated, especially in manufacturing. She called for bipartisan action to address data security, consumer privacy, and worker protections while maintaining AI’s economic benefits.

  Rep. Veasey asked about energy concerns related to AI and manufacturing. Ms. Humpton emphasized that AI-driven energy management solutions, including microgrids and on-site power generation, can help manufacturers optimize power usage. She noted that Siemens has worked with the Department of Energy to develop technologies that improve energy efficiency and resilience.

• Rep. Lee asked for examples of how Siemens uses AI in manufacturing and supply chains to assist, rather than replace, workers. Ms. Humpton shared stories illustrating AI’s role in improving efficiency, such as generative design tools that outperformed human engineers in creating lighter aviation motors and digital twin models that helped battery manufacturers avoid costly mistakes. She also highlighted how AI optimizes factory stocking, restocking, and workflow planning to improve safety and productivity.

  Rep. Lee asked how Autodesk software makes manufacturers more resilient to supply chain disruptions and inflation. Mr. Kinder explained that Autodesk supports industrialized construction, which integrates manufacturing efficiencies into construction processes, reducing costs and time. He highlighted how AI and digital twins enhance collaboration across traditionally disconnected construction and manufacturing sectors.

  Rep. Lee asked how AI fosters innovation in manufacturing. Mr. Kinder stated that AI alleviates labor shortages by automating tedious tasks, allowing workers to focus on more creative and high-value work, ultimately driving greater efficiency and innovation.

• Rep. Kelly asked whether the federal government should take a leading role in mapping and monitoring supply chain vulnerabilities. Dr. Reynolds agreed, citing the COVID-19 pandemic as proof that both the government and private sector lacked visibility into supply chains. She emphasized that AI could help predict vulnerabilities and that government oversight is essential for improving supply chain resilience.

  Rep. Kelly asked why federal investment in small and medium-sized manufacturers is important despite budget constraints. Dr. Reynolds argued that SMEs are the backbone of U.S. manufacturing but often lack resources to adopt AI and digital transformation. She emphasized that supporting SMEs is critical for national security, supply chain resilience, and industrial innovation, citing the Department of Defense’s recognition of these challenges.

• Rep. Kean asked what policy tools Congress should prioritize to help small and medium-sized manufacturers access AI-enabled technologies. Ms. Humpton stressed the importance of public-private partnerships, particularly leveraging manufacturing institutes and community colleges to scale AI adoption. She also suggested new licensing structures to make AI tools more affordable for SMEs.

  Rep. Kean asked how Congress can better position the U.S. for competitiveness in AI and technological advancements. Mr. Oxman praised the Lift AI Act for supporting AI workforce development through National Science Foundation grants and STEM education programs, urging continued congressional focus on AI workforce readiness.

  Rep. Kean asked about the impact of the Stargate Project on AI growth and U.S. manufacturing. Mr. Oxman described it as a multi-billion-dollar investment in AI infrastructure, with the first data center campus announced in Texas and more to follow. He projected that the initiative would create 40,000 jobs initially and potentially hundreds of thousands nationwide, strengthening U.S. AI leadership.

• Ranking Member Pallone asked how the Inflation Reduction Act, the CHIPS and Science Act, and the Bipartisan Infrastructure Law have helped U.S. manufacturers compete globally. Dr. Reynolds noted that these investments have driven long-term growth, attracted private sector investment, and positioned the U.S. to compete globally in high-tech industries. She warned that recent policy uncertainty could undermine these gains.

  Ranking Member Pallone asked about the risks of tariffs imposed on close allies, such as Canada and Mexico, and their impact on manufacturing. Dr. Reynolds cautioned that tariffs disrupt supply chains, increase manufacturing costs, and jeopardize jobs. She stressed that strong trade relationships with allies are essential, particularly in industries like automotive manufacturing, where North American supply chains are deeply integrated.

• Rep. Evans asked about the role of AI in protecting critical infrastructure from foreign threats and how to prevent intellectual property theft. Mr. Oxman stated that AI plays a key role in cybersecurity, helping to harden networks and infrastructure against adversaries. He emphasized the need to balance national security concerns with economic opportunities for American companies in international markets, noting that the Trump administration is actively seeking industry input on AI regulations.

  Rep. Evans asked how Congress can ensure the U.S. remains a leader in AI and AI-driven manufacturing amid rising energy demands. Mr. Kinder acknowledged that AI requires significant energy and suggested that Congress focus on strengthening the power grid and supporting a diverse range of energy sources. He also predicted that AI chips and model training processes would become more energy-efficient over time.

  Rep. Evans asked how AI can help manage microgrids amid fluctuating energy supply and demand. Ms. Humpton called AI-driven energy management one of the most exciting areas of innovation, noting that software can now optimize power distribution at all levels—from large utilities to individual homeowners with rooftop solar. She urged Congress to trim regulations that impede progress and pledged Siemens' support in advancing AI-powered grid solutions.

• Rep. Trahan asked how public-private partnerships accelerate the onshoring of manufacturing. Dr. Reynolds highlighted Massachusetts as a leader in university-industry collaboration, explaining that investments in research institutions help create globally competitive startups and new technologies. She emphasized that these partnerships are key to advancing manufacturing in the U.S.

  Rep. Trahan asked how sudden federal funding freezes impact manufacturers and their private sector partners. Dr. Reynolds stressed that policy unpredictability disrupts long-term investments, particularly in research and development, where labs and talent pipelines require years to build. She warned that sudden funding changes undermine business confidence and deter private sector engagement.

  Rep. Trahan asked how threats to STEM education and workforce development programs would impact U.S. manufacturing. Mr. Kinder noted that Autodesk works with over 19,000 educational institutions to provide free software for training future workers. He warned that cutting education and technical training programs would severely limit the ability to develop a skilled workforce for AI-driven manufacturing.

• Rep. Goldman asked why it is crucial for defense manufacturers to have access to cutting-edge AI and manufacturing technology. Mr. Oxman said AI-powered manufacturing is key to both national security and economic growth. He cited Texas as an example of rapid investment in semiconductor manufacturing, AI infrastructure, and defense technologies, emphasizing the importance of a supportive policy environment.

  Rep. Goldman asked about Siemens' work in optimizing data centers and their role in domestic manufacturing. Ms. Humpton explained that Siemens contributes to AI infrastructure at multiple levels, from semiconductor design to data center construction and energy management. She emphasized that AI-driven efficiencies in data centers are essential for the future of U.S. manufacturing.

  Rep. Goldman asked about the feasibility of autonomous manufacturing facilities and the role of regulations. Ms. Humpton acknowledged that AI can enhance productivity by automating certain tasks but stressed that human workers remain essential for logistics, assembly, and problem-solving. While some sectors, like pharmaceuticals, may see more automation, she believes manufacturing will continue to require human oversight and creativity.

• Rep. Schrier asked how new U.S. tariffs on steel and aluminum imports, particularly from Germany, might impact Siemens' supply chain and exports. Ms. Humpton responded that no business wants increased costs but stated that Siemens remains committed to adapting to policy changes while maintaining its focus on U.S. manufacturing and its customers' needs.

• Rep. Cammack asked each witness to share any key points they had not yet covered in the hearing. Ms. Humpton emphasized that industrial AI is distinct from consumer AI and appreciated the comprehensive discussion. Mr. Kinder highlighted Autodesk’s work in industrialized construction, emphasizing its potential to cut costs, improve efficiency, and reduce waste, particularly in housing. He cited a modular construction project in Oakland that used AI to create affordable housing at half the usual cost and time. Dr. Reynolds stressed the urgency of maintaining the momentum in U.S. manufacturing, noting that hundreds of new facilities and AI-driven startups are transforming the industry. She called for continued investment in both technology and workforce development. Mr. Oxman raised the issue of tax policy, specifically advocating for restoring the 2017 R&D tax deduction to incentivize domestic manufacturing investment.

• Rep. Souchin asked about the biggest challenges facing small and mid-sized manufacturers. Mr. Kinder explained that these companies struggle with global competition and lack the economies of scale or government subsidies that larger firms benefit from. He emphasized that investing in digital transformation and AI requires significant upfront costs, which is a major hurdle for smaller businesses.

  Rep. Souchin asked if the R&D tax credit could help small and mid-sized manufacturers invest in AI. Mr. Kinder affirmed that tax credits supporting R&D investments would be beneficial.

  Rep. Souchin asked how Autodesk helps manufacturers integrate AI and what Congress can do to facilitate AI adoption. Mr. Kinder said Autodesk focuses on solving specific industry problems with AI, such as automating design modifications to improve efficiency. He suggested that Congress support policies that make AI adoption easier for small manufacturers.

  Rep. Souchin asked about AI’s role in optimizing supply chains. Ms. Humpton noted that AI helps logistics experts analyze networks, identify bottlenecks, and find alternatives, making supply chains more resilient.

• Vice Chairman Joyce asked about the importance of energy policy in securing U.S. AI leadership. Mr. Oxman stressed that AI relies on data centers, which require significant energy. He highlighted that energy solutions, including nuclear power, are critical to sustaining U.S. innovation in AI.

  The Vice Chairman asked how Siemens competes against foreign companies that engage in unfair practices like currency manipulation, intellectual property theft, and the use of captive labor. Ms. Humpton stated that Siemens prioritizes working within fair regulatory environments and that AI can boost worker productivity, making U.S. manufacturing more competitive globally. She emphasized that AI-driven efficiency will help U.S. manufacturers outperform bad actors on the world stage.

  Vice Chairman Joyce concluded by reaffirming that AI and manufacturing will play key roles in revitalizing the U.S. economy.

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