Artificial Intelligence as a Location Factor: Analysis (2025)
Artificial Intelligence is becoming a key driver of economic transformation in German cities, reshaping local ecosystems through research, startups, and innovation adoption. While cities like Munich and Heidelberg lead the way, regional differences highlight the importance of strategic investment and urban development in harnessing AI’s potential.
AI Firms on the Rise in German Cities: A Decade of Growth
This chart presents the development of AI-related firms in six German cities from 2014 to 2024, based on ISTARI.AI’s AI indicator. It provides a longitudinal view of how the presence of AI-related businesses has changed regionally over time.
Across most cities, a steady increase in the percentage of AI-related firms is visible, especially between 2017 and 2020. By 2024, Munich and Heidelberg show the highest relative shares, each above 3%. Other cities such as Berlin, Mannheim, and Leipzig show moderate but continuous growth.
City Overview
- Munich & Heidelberg
Both cities reach over 3% AI-related firms by 2024. Heidelberg, in particular, has shown strong growth in recent years. - Berlin
Reaches around 2.4% in 2024, showing steady development over the period. - Mannheim
Displays a similar growth curve to Berlin, reaching around 2.3%. - Leipzig
Approaches the 2% mark with continuous, though more gradual, growth. - Bremerhaven
Reaches a peak of approximately 0.8% in 2022, followed by a slight decline.
General Observations
The sharp increase in AI-related firms starting around 2017 aligns with global trends in AI commercialization. Continued growth post-2022 could reflect broader awareness and practical applications of AI technologies, including generative models.
Interpretation Caution
While regional differences are visible, the chart does not explain their causes. Variations may result from differences in economic structure, research presence, infrastructure, or reporting.
Conclusion
The diffusion of AI technologies among firms in German cities over the past decade shows broad national growth with local variation. The ISTARI.AI indicator provides valuable localized insights into how digital technologies are shaping regional economies.
