TL;DR:

• Siemens chief executive Roland Busch told Bloomberg that most of the company’s €1 billion (roughly £830 million) industrial AI investment will go to the United States unless the EU adapts its AI Act and Data Act, which he says “miss the mark” on industrial use.
• German Chancellor Friedrich Merz used the same Hannover Messe industrial fair to call for exempting industrial AI from the EU’s “regulatory straightjacket”, per Reuters.
• The combined industrialist-and-head-of-government push is the strongest public signal yet that Germany will lobby hard to reshape the AI Act in 2026 — with direct implications for the UK’s regulatory divergence calculus.

Busch’s specific complaint, in the Bloomberg interview, is that the EU treats industrial AI like consumer applications and piles additional oversight on top of sector-specific rules that already apply. That framing — redundant regulation rather than excessive regulation — is deliberately narrow, making it politically easier for the Commission to concede.

Why the UK reading matters

For UK industrial firms and their advisers, the Siemens-Merz push changes the competitive landscape on two fronts. First, it suggests the EU may be forced to carve out industrial AI treatment that is closer to the UK’s light-touch, sector-regulator model — narrowing the regulatory-arbitrage case for basing industrial AI R&D in Britain. Second, it raises the prospect of a transatlantic split where US and UK regimes are broadly aligned on industrial AI treatment while the EU sits alone with tighter rules.

The UK government has made pitches to German and French industrial firms over the past year, arguing London-adjacent manufacturing hubs and UK capital markets offer a cleaner regulatory path. If Merz secures industrial-AI concessions in Brussels, that pitch weakens immediately. DSIT and the Department for Business and Trade will need to recalibrate the Sovereign AI Fund story and inward-investment messaging accordingly.

Cross-source context

Reuters reports Merz told the Hannover Messe audience he “will push to ease the regulatory burden in the EU on AI” — a rare direct public intervention from a German Chancellor against a specific Commission regime. Germany previously committed to a fourfold increase in AI data processing capacity by 2030, a signal that Berlin views the underlying race against US and Chinese players as one of the decade’s strategic economic contests.

Looking forward

The test is whether the Commission concedes an industrial-AI carve-out in the AI Act’s next review cycle or digs in on the current structure. If a carve-out emerges, expect UK industrial strategy to pivot from “regulatory divergence” to “capital, skills and energy” as the primary pitch — a harder sell in the short term but one better aligned to what UK firms actually say they need.