Industrial AI in action: How AI agents and digital threads will transform the manufacturing industries

Manufacturing is set for a major transformation with AI agents. These AI agents are programs that interact with their environment, perceive data, and act on that data, enabling organizations to gain insights, speed up innovation, and transform value chains. At Hannover Messe 2025, Microsoft and our partners will showcase how these technologies are creating a more connected, efficient, and intelligent future for the industry. Organizations will see how they can move faster, adapt smarter, and lead with confidence. 

Yet even with all this progress, for decades fragmented systems and heterogenous environments have kept digital threads within the industry largely aspirational, preventing most organizations from achieving synchronized operations. A persistent inability to connect modern technology solutions with aging infrastructure has also slowed the collaboration long promised to manufacturers. Together, unified data and AI are now enabling organizations of all sizes to break through these barriers, transforming digital threads from static, disconnected datasets to dynamic networks. With AI agents serving as the interface, every worker can surface the overall equipment effectiveness (OEE), total cost of ownership (TCO), and return on investment (ROI) insights necessary to drive decision-making.

At Hannover Messe 2025, Microsoft is showcasing how new AI agents and partnerships with leading software vendors can help manufacturers deliver secure, scalable innovation from the shopfloor to the boardroom. Attendees will experience firsthand how data-driven intelligence and AI-enabled solutions will reshape manufacturing.

AI agents supporting the development of frontline workers 

Manufacturing transformation is reaching into every aspect of operations. Frontline workers now have access to AI agents providing them with enhanced guidance needed to make informed decisions. To expand this modern toolbox, we announced back at Ignite 2024 the public preview of Factory Operations Agent in Azure AI Foundry. An AI-powered assistant, Factory Operations Agent streamlines operations—enabling operators, production, and leaders to quickly access insights and optimize manufacturing processes through natural language querying. In doing so, the agent accelerates issue resolution and root cause analysis to improve productivity within day-to-day manufacturing operations.

As the industry struggles with turnover, worker skilling is an ever-present challenge. The World Economic Forum found that 63% of industry leaders believe skilling to be a significant barrier to growth.¹ Manufacturers need no-code and low-code options that democratize the power of AI without the need for extensive coding. With this in mind, we are announcing the same Factory Operations Agent now available in Copilot Studio in public preview, where with one-click it can be easily integrated into products like Microsoft Teams.

Finally, we’re announcing the public preview of Factory Safety Agent in Copilot Studio. This low-code, customizable solution provides workers with answers to occupational health and safety (OHS) questions and guidelines. It can also streamline safety inspections and personalize workforce training. 

Also, at Hannover Messe 2025, we will be showcasing state of the art technologies that will enhance the future of frontline work, like with our customer Sanctuary AI.

Sanctuary AI is shaping the future of frontline work, ushering in the era of autonomous labor with the power of Microsoft Azure. As frontline labor shortages intensify, manufacturers can explore deploying advanced general-purpose robots with dexterity-driven physical AI to automate repetitive, complex, and unsafe tasks to enhance operational efficiency. With Azure’s high-performance graphics processing units (GPUs), Sanctuary AI can train machine learning models at scale, pushing the boundaries of dexterous intelligence. 

Advancing innovation in digital engineering with generative AI 

Manufacturers shape their market leadership through digital engineering and design. By accelerating development and prototyping, and reducing time-to-market, AI-powered generative design is empowering manufacturers to create new high-performing, customer-centric products.

Aras is introducing Aras InnovatorEdge, a low-code application programming interface (API) management framework embedded in the Aras Innovator® platform. This solution simplifies API creation and integration, enabling secure, scalable data connectivity and enhancing collaboration, operational efficiency, and decision-making across enterprises. It integrates seamlessly with Microsoft Fabric, unlocking deeper insights and optimizing decision-making across the digital engineering landscape. 

Autodesk and Microsoft collaborate to create an AI-powered digital thread to help manufacturers gain efficiencies, reduce costs, and compete smarter. Autodesk® Fusion, the industry cloud for manufacturing, connects people, data, and process through the product development lifecycle. Autodesk Data solutions in Fusion Manage and Microsoft Fabric will enable efficient data management and process optimization. Additionally, Autodesk’s digital twin offerings with Tandem, factory simulation through FlexSIM, and factory operations management with Fusion Operations all benefit from this collaboration, ensuring that these tools work seamlessly across the IT and OT ecosystem. 

Windchill by PTC is a crucial platform for engineering and manufacturing teams globally. To support manufacturers aiming to integrate AI across their value chains, PTC and Microsoft are partnering to develop an enterprise data framework and multi-agentic model within Microsoft Fabric. This collaboration extends digital thread capabilities beyond traditional product lifecycle management (PLM), integrating data from enterprise resource planning (ERP) and manufacturing execution system (MES) systems, and enabling AI-powered insights and workflows. 

Preparing the factory edge for AI  

AI is redefining factory operations, but to fully capitalize on shop floor investments, manufacturers need to integrate their on-premises industrial edge solutions with the cloud. 

A core component of the Azure adaptive cloud approach, Azure IoT Operations is built on industry standards. Capturing data from industrial equipment assets and devices, Azure IoT Operations normalizes it at the edge—sending operational insights to the cloud and back.

Husqvarna is leveraging Azure IoT Operations and AI tools to digitally transform its factory floors. Their AI Vision Companion enhances visual quality control for chainsaw production, while AI chatbots assist night workers with troubleshooting, improving efficiency, and reducing downtime. With these new capabilities, Husqvarna expects to double their in-market connected devices and boost robotic lawn mower sales, expanding Azure IoT Operations from two to 40 factories globally by summer 2025. 

Siemens and Microsoft have expanded their partnership, Siemens Industrial Edge works seamlessly with Microsoft Azure IoT Operations, making OT and IT data planes fully interoperable for manufacturing. This joint effort streamlines data flow between edge and cloud, enhancing machine performance, product quality, and maintenance efficiency, and enabling manufacturers to adopt AI and digital twin technologies for more adaptive, optimized production.

Making AI-powered digital threads a reality for manufacturers 

The nervous system of industrial operations, digital threads weave together critical information, processes, and people across manufacturing segments. Grounded in unified operational (OT), information (IT), and engineering (ET) data, the electronic frameworks can empower individuals with relevant, timely insights. From initial concept to customer support, this continuous flow of data connects and enriches every aspect of manufacturing.

For over a century, Rolls-Royce has been a force for progress; powering, protecting, and connecting people everywhere. Today, with digital transformation at the forefront, the company is redefining how its world-class products are designed, built, and maintained. Hannover Messe 2025 visitors will see firsthand how AI and cloud technologies are shaping the future of aerospace. With the help of Siemens and Microsoft, Rolls-Royce is leveraging AI to streamline production, boost engine efficiency, and predict maintenance needs before issues arise. Rolls-Royce is also helping provide more efficient, reliable, and low-emissions energy solutions, powering everything from critical infrastructure to data centers. Rolls-Royce isn’t just keeping up with the digital revolution—it’s driving it.

Without AI, manufacturing data is difficult to navigate. Data quality, standardization, and integration have been unreliable. Microsoft is helping manufacturers make sense of their data to unlock the AI opportunity. With Microsoft Fabric, manufacturers can integrate data across different departments and teams. Traditionally, this data is trapped within separate systems. Parsec and Tulip integrations mark another major step in our ability to drive operational intelligence, enhancing shop floor and frontline execution. 

Parsec, developer of the industry-leading MES, TrakSYS™, today announced an upcoming integration with Microsoft Fabric and the factory operations agent in Azure AI Foundry solution to help deliver generative AI to manufacturing organizations. Dubbed TrakSYS IQ, this industry-defining functionality will enable users to retrieve and analyze factory data through a conversational user interface, bolstering productivity and data-based decision-making. 

Tulip, a leader in frontline operations solutions, announces its integration with Microsoft Fabric. This integration enables the Tulip Frontline Operations Platform to deliver scalable analytics across multiple factories, leveraging rich datasets for machine learning to provide real-time feedback and alerts to supervisors and operators. 

See Industrial AI in action at Hannover Messe 2025

The future of manufacturing is powered by AI. This year, at Hannover Messe 2025, attendees will have the opportunity to experience how Microsoft and its partners are supporting the industry transformation—from digital engineering, on factory floors, with frontline workers, and through digital thread. Join us at Hall 17, Stand G06. 

Thanks to all partners and customers joining Microsoft at Hannover Messe 2025: ABB, Accenture Avanade, Autodesk, AVEVA, AVL, Bayer, Blue Yonder, Bosch, Bühler Group, C3.ai, Capgemini, Cognite, Databricks, EPLAN, Hexagon, Husqvarna, Kongsberg Digital, Litmus, MTEK, NVIDIA, NTT Data, o9, Parsec, PTC, PWC, Rescale, Rockwell Automation, Rolls-Royce, Sanctuary AI, Sandvik, Schneider Electric, Siemens, Sight Machine, Symphony AI, TeamViewer, TCS, and Tulip. 

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¹WEF: Skill Gaps are the Biggest Barrier to Transformation, Skillsoft.

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Source: Microsoft Industry Blog