In 2024, the Nobel Prize in Physics was awarded to American Professor Dr. John Hopfield from Princeton University and British-Canadian researcher Professor Dr. Geoffrey Hinton from the University of Toronto. Their groundbreaking work laid the foundation for machine learning with artificial neural networks. Today, these technologies are widely recognised and used by almost everyone – whether through Siri, Alexa, Copilot, Gemini, ChatGPT or others – artificial intelligence has become seamlessly integrated into daily life in the form of language models, customer service provision and image generation. But where can AI be applied in innovative and valuable ways in the business world?

In February 2021, 16 partners – cities, districts, business development agencies, chambers of commerce and associations from the Stuttgart, Karlsruhe, Neckar-Alb, northern Black Forest, Freiburg and Ostalbkreis regions – got together and founded the Baden-Württemberg AI Alliance in order to promote the use of artificial intelligence in Baden-Württemberg. "There are now 18 partners in the cooperative, including research institutions and multipliers," explains Sandra Rohner, Managing Director of the Baden-Württemberg AI Alliance, which is based in Stuttgart.

"The partners’ goal is to make AI widely accessible and usable," says Rohner. To advance this vision, the Ministry of Economic Affairs provided funding to the cooperative in 2024, allocating approximately 2.4 million euros for community management within the regional AI centres of excellence. Overall, the Ministry of Economic Affairs is investing around 11.5 million euros in Baden-Württemberg AI Alliance projects and initiatives until the end of 2025. This includes approximately 5.8 million euros allocated to the state-wide pilot AI data platform for industry. "Put simply, the AI data platform will supply training data for AI solutions, making it easier for small and medium-sized enterprises (SMEs) to develop their own AI applications," explains Rohner. "The project also ensures that all data adheres to European ethical and legal standards." This data can vary widely - for example, municipal data from environmental monitoring sensors or production data from machine tools. Such datasets could inspire SMEs and start-ups to identify links between data in innovative ways and drive the development of new products and services.

Another major initiative targeted at start-ups is the AI investor plug-In, which is designed to connect AI start-ups with potential investors. Operated by the CyberLab in Karlsruhe, the service prepares start-ups for upcoming financing rounds through expert feedback, guidance and access to a broad network of investors.

Other regional projects aim to make AI more accessible to SMEs. Alongside the AI Innovation Lab in Karlsruhe, these initiatives include the FRAI.accelerator in Freiburg. In Freiburg, two consortium partners are working together: Grünhof 3000 GmbH, a consulting agency, and BadenCampus GmbH & Co. KG, an innovation and start-up centre. Irena Limberg, Senior Consultant and Project Manager at Grünhof 3000, outlines the FRAI.accelerator programme, which is divided into four phases: 1. Exploration: workshops are held to establish the foundations, referring to best practices to demonstrate practical AI use cases. 2. Analysis and preparation: individual ideas are developed, feasibility is assessed based on the SME's specific value chains, and the potential benefits of the AI project for the company are identified. 3. Prototype development: a pilot use case is implemented, with experts assisting companies in collaborating with selected technology partners. 4. Scaling: after a successful prototype phase, the AI solution is scaled for broader integration into the company's operations.

By late 2024, three companies had reached the final phase of the FRAI.accelerator programme. "In 2025, Grünhof 3000 plans to shift its focus to the healthcare and medical sectors," says Limberg. Particular attention will be paid to the industry's stringent regulatory requirements and the need for robust data security. The project is 50 percent financed by state funding, with participating companies covering the remaining costs. "To ease the entry process, we offer an exit option after the second phase," Limberg adds. This flexibility acknowledges that, in some cases, the initial phases may reveal that a company is not yet ready to venture into AI – perhaps due to a lack of required data that needs to be generated first.

Another regional project based in Freiburg is already making strides in the field of medicine. "The FRAI.lab Medicine aims to significantly enhance early cancer detection through AI-powered data analysis. The goal is no less than to revolutionise cancer diagnostics," explains Rohner. Meanwhile, the AI Experience Room in Reutlingen offers a unique, interactive approach to understanding AI. Designed as an escape room, this regional project introduces participants to the world of AI in a fun and engaging way.

One of the key concerns for the Baden-Württemberg AI Alliance is to avoid creating any duplicate structures. "We see ourselves as a hub, a central point of contact that operates in the AI environment. It is important to us to strengthen the economic power in Baden-Württemberg by helping companies to find AI solutions that fit," emphasises Rohner. The community managers focus on the regional AI sector. However, the industrial sector outside Germany is also being monitored. "We want to open up the market to companies that offer solutions, but also give users from Baden-Württemberg the opportunity - if there is no suitable solution locally - to look for solutions abroad," says Rohner.

However, AI is not without its challenges and risks. It can impact privacy and data protection, flawed designs can lead to discrimination, and it poses threats to democracy through mechanisms such as filter bubbles and deepfakes. The European Union's Artificial Intelligence Act addresses these concerns. The Act imposes obligations and requirements specific to the risks posed by the AI system in question – the higher the risk, the stricter the rules. High-risk AI systems include those used in medical devices and aviation, where failure could have serious consequences. "We stand for trustworthy AI, i.e. AI that operates transparently, with clear criteria for how decision-making proposals are generated," says Rohner. "We advocate for AI made in Europe, made in Baden-Württemberg, or made in Germany. We recognise that data protection is a top priority for many users. That’s why the alliance collaborates with legal experts and ethicists from the University of Tübingen to ensure these critical aspects are never overlooked." Rohner adds, "Our goal is to showcase the benefits of AI. However, we are fully aware of its risks, which we address openly and communicate transparently."

The goal of the Baden-Württemberg AI Alliance is to identify the specific needs of SMEs in the region regarding the use of AI by the end of 2025. "SMEs often struggle when it comes to accessing consulting services," says Rohner. "It’s clear that finding the right solutions can be challenging, as AI requires delving deeply into business processes." The Baden-Württemberg AI Alliance aims to support companies throughout this journey, lower barriers to AI implementation and make these technologies accessible to a wider audience. In so doing, the alliance seeks to bring AI into mainstream use and empower SMEs to harness its potential effectively.