It’s no mystery that 2025 was a transformative year with both expansion and contraction taking shape across the automotive industry, energizing a rapidly evolving mobility landscape.
Trusted solutions for the automotive industry
Change and disruption were the norm
We saw original equipment manufacturers (OEMs) and suppliers announce investment strategies and product re-alignments across electric vehicle (EV), hybrid, and internal combustion engine (ICE)-powered segments. We witnessed new software-defined vehicle (SDV) platform developments like the introduction of BMW’s Neue Klasse SDV platform, and saw exciting in-vehicle experiences that go beyond traditional screen-projection with embedded and secure vehicle operating systems that offer AI-powered productivity and interactivity as seen with Mercedes-Benz.
There were advances across all areas of vehicle development as the industry grappled with consumer sensitivity around cost, product availability, and a desire for more personalized and connected experiences inside the vehicle.
From hardware to software
As software continues to drive new vehicle development—approaching the scale of billions of lines of code—its importance to vehicle engineering has become critical, even regulated with requirements to maintain software fitness and security over the vehicle lifecycle. Automakers and suppliers are embracing this shift, however, and recognize that with a focus on software and data, they can now offer new products and services that drive unique differentiation and can improve customer value, loyalty, sales, and service. The adoption of cloud and AI technologies has added a force multiplier to this transformation across the entire industry.
While hardware will always be in the mix, we continue to see a focus on reducing the number of vehicle domain controllers and consolidating compute.
Less is more
Less is indeed more, and the goal for automakers when it comes to time to market. With aggressive plans for new vehicle introductions over the next two to three years, OEMs and their suppliers are creating paths to shorten the time it takes to introduce new vehicles and products to market. This is pushing cycles from a typical 48 to 60 months down to 24 to 36 months to remain competitive.
The AI push is real
Across all industries, and especially within automotive, the adoption of AI and AI agents has enabled improvements in design, requirements management, coding, and vehicle engineering functions, leading to enterprise efficiency, rapid innovation, customer satisfaction, and shorter overall development times.
CES 2026—The stage is set
With that said, the stage is now set for 2026 and the annual technology-infused tour de force at CES 2026. For years, CES has been known for highlighting both current and inspiring future technology. This is also true for automotive at CES 2026 as evidenced by the population of exhibitors and attendees over the past few years. It will be interesting to see how that landscape has evolved for this year’s event given the new dynamics at play.
Microsoft for automotive at CES 2026
For the fifth consecutive year, Microsoft will showcase its impact on automotive as the secure technology platform powering the next frontier of automotive innovation. With our cloud and AI solutions, along with our ecosystem of acceleration partners, Microsoft is transforming processes across the automotive “V” model—from requirements and engineering to development and testing.
At CES 2026, we are particularly focused on the transformation within digital engineering, helping our automotive and mobility customers establish strong software capabilities. This includes areas such as SDVs, embedded software, vehicle advanced driver-assistance systems (ADAS), and autonomy. In addition, meeting OEMs brand differentiation requirements through unique in-vehicle experiences with a focus on the digital cockpit is another core spotlight.
Our customers and partners also seek our differentiation around enterprise-grade security, global-scale cloud, AI copilots integrated across engineering workflows, and an open ecosystem vs. vertically locked platforms.
At CES 2026, Microsoft and our partners are demonstrating how AI-powered engineering and in-vehicle intelligence are converging to accelerate SDV development and redefine the driver experience.
Digital engineering
Digital engineering demands cloud infrastructure that can scale globally, adapt in real time, and deliver consistent performance across increasingly complex workloads—from AI inference and data-intensive analytics to embedded development and full vehicle simulation. Recent Microsoft Azure innovations remove longstanding compute and operational bottlenecks by supporting heterogeneous architectures such as Arm64, graphics processing units (GPUs), and field-programmable gate arrays (FPGAs), enabling end-to-end engineering from chip to cloud. Elastic scaling empowers globally distributed teams with cloud-native CI/CD pipelines and real-time analytics, while high-performance computing accelerates software-defined vehicle (SDV) development through advanced simulation, validation, and software-in-the-loop testing—allowing teams to move faster, validate earlier, and bring intelligent systems to market with greater confidence.
We shared some exciting new announcements in both digital engineering and in-vehicle innovation below:
AMD and Siemens: AMD is providing new engineering support for OEMs and Tier 1 suppliers with the AMD VAS stack running on Microsoft Azure, enabling virtualization of development environments. This integration enables systems-level simulation to support earlier engineering validation efforts aimed at improving efficiency, reducing development risks with SDV development, and reducing time to market. Learn more about the AMD announcement.
With this capability, Siemens will integrate their PAVE360™ digital twin simulation environment into the AMD VAS stack on Azure, providing developer support for AMD compute and graphics technologies. Discussing this and other topics further at CES 2026, Siemens will also feature a panel lineup with President and Chief Executive Officer Roland Busch joined by executives from NVIDIA, Microsoft, PepsiCo, and Commonwealth Fusion. The panel will share a dialog on the impact of AI in transforming the physical world to transform manufacturing, infrastructure, and transportation.
ETAS: As a leading provider of innovative solutions for the development of automotive software, emergency technical assistance service (ETAS) brings its core calibration suite to Azure, enabling automotive engineers to accelerate SDV development through cloud-based engineering tools. The ETAS toolchain on Azure enables OEMs to move software development activities to start an earlier point in time, a term known as “shift-left,” which enables late-stage vehicle development processes to be performed earlier—saving time, improving quality, and enabling faster iteration cycles. Read the blog to learn more.
KPIT: KPIT will demonstrate their Next-Generation Agentic AI Solution Suite at CES 2026—a flexible, cloud-based tool designed to make vehicle software development faster, more reliable, and cost-effective for automakers. By using advanced AI on Azure, KPIT helps OEMs improve the way they design, and build connected and self-driving vehicles. This technology provides more efficient processes to update vehicle software, diagnose and resolve problems more quickly, and deliver better experiences for drivers, leading to higher quality vehicles and more satisfied customers. Learn more.
Neural Concept: Neural Concept focuses on improving vehicle aerodynamics, a critical factor for enhancing vehicle performance, energy efficiency, and reducing development costs. As development timelines in the automotive industry continue to shorten, the demand for data-driven approaches that complement or replace traditional computational fluid dynamics (CFD) workflows become increasingly important. By utilizing the MIT DrivAerNet++ dataset—which contains 8,000 vehicle designs and extensive CFD information, Neural Concept supports advanced research and development in engineering. These innovations empower automakers to achieve design cycles that are 30% shorter. Learn more about Neural Concept at CES 2026.
PTC: Considering speed to market, PTC announced a collaboration with Lamborghini S.p.A to improve overall product lifecycle through their centralized data foundation that connects design, engineering, and operations with enhanced AI capabilities. Also, through their collaboration with Microsoft, PTC will demonstrate a new engineering change management solution—an AI-powered agent to streamline the engineering workflow that has broad applicability even beyond automotive. Meet PTC at CES 2026.
Renesas: Continuing with the theme of digital engineering and SDV, Renesas, an advanced semiconductor solutions provider, announced an industry first integration to create a vendor-neutral SDV-as-a-Service platform, powered by Azure along with Visual Studio Code integration, GitHub CI/CD pipelines, and Microsoft Copilot AI. The Renesas RoX DevStudio enables OEMs and other partners with cloud-based tools to architect, develop, simulate, test, and deploy SDV architectures, supporting the entire v-model. Discover more with the Renesas blog.
Digital Cockpit and in-vehicle experiences
The rapidly growing in-vehicle infotainment (IVI) market is transforming with new AI-powered experiences improving driver safety, comfort, and even productivity.
Bosch: In collaboration with Microsoft and NVIDIA, Bosch is introducing in-vehicle cockpit innovation at CES 2026. The Bosch AI cockpit, launched as the “AI extension platform,” will provide compute power to enable AI capabilities on the edge to existing vehicle cockpit systems. This is significant in that automakers can use their existing hardware infrastructure in the vehicle. This new platform is powered by NVIDIA’s Drive Orin system-on-chip (SoC), delivering high-performance with only power and Ethernet interfaces, simplifying electrical and electronics (E/E) infrastructure while supporting modern vehicle computing needs. With this powerful platform and the integration of Microsoft Foundry and specialized cockpit features, Microsoft and Bosch are transforming the car into a mobile office without compromising driver safety. This combination not only enables access to Microsoft 365 applications productivity suite and intuitive voice command, but it integrates intelligently with other vehicle systems to prioritize safety and minimize distraction—like enabling adaptive cruise control while on a Microsoft Teams call—demonstrating a key use case for how AI will revolutionize the cockpit and driving experience. Learn more about Bosch innovations at CES 2026.
Cerence AI and NVIDIA: In another milestone collaboration with Cerence AI, NVIDIA, and Microsoft, Cerence announced Cerence xUItm , a new, hybrid, agentic intelligence solution for OEMs to meet rising demand for fast, edge/in-vehicle large language model AI to power new in-car experiences. Learn more at CES 2026.
FORVIA: Building on the existing Microsoft Teams integration work from 2025, Appning by FORVIA collaborates further to bring AI-powered experiences enabled by Microsoft Foundry Tools to the Appning Apps market ecosystem. This collaboration supports advanced conversational interfaces, content, and services for personalized user experiences. Learn more.
TomTom: The location technology experts at TomTom combine their mapping and traffic intelligence data in a unique platform that gives OEMs ultimate flexibility in creating unique, branded, and connected experiences delivered in weeks instead of months. The platform also builds on the Microsoft Cloud and generative AI capabilities into the TomTom AI Agent.
Microsoft for automotive and our partner ecosystem
In addition to the partners making announcements at CES 2026, we will showcase a vibrant partner ecosystem supporting automotive and mobility including:
| AMD | Ansys |
| ETAS | PTC |
| QNX | Siemens |
| Synopsys | TCS |
Microsoft is committed to partnering with OEMs and suppliers to accelerate SDV development, modernize engineering, and deliver intelligent, differentiated in-vehicle experiences. Learn more about Microsoft for automotive.
As the Product Marketing Director for the Mobility Industry, Aaron Lee oversees Microsoft's marketing efforts for the automotive, travel, transportation, and hospitality sub-verticals. He aims to help customers understand how the Microsoft Cloud and Microsoft's partner networks can solve some of the industry's toughest problems and create a more sustainable future.
