DAVID MCHUGH FRANKFURT, Germany — Nvidia CEO Jensen Huang urged Germany’s makers of cars and industrial machines to quickly adopt artificial intelligence to “re-engineer” the country’s struggling business model by tapping its wealth of manufacturing data and expertise.

Huang, whose company designs the powerful computer chips and software used by companies like Anthropic and OpenAI to develop AI applications, said that digital technology would never replace manufacturing and the engineering world of cars and robots where Germany has vast experience.

Or, as he put it, “electrons will never replace atoms.”But he said industry would benefit by leaning into technology.

“The next wave of AI is physical. This is where AI interacts with the physical world: robotics, manufacturing, cars, heavy industry,” Huang said Monday during a discussion with German Chancellor Friedrich Merz at an investment conference in Berlin.

“And so AI can only augment your capability. It will not replace your capability. So take advantage of the technology.”Huang said Germany’s data and expertise on manufacturing “is your natural resource, it belongs to the nation” but it needs to take better advantage of AI. “This industrial revolution is so mighty, so powerful. You don’t have another chance,” he said.

European leaders like Merz are looking to AI as a potential source of growth but are also concerned about the extent of European dependence on U.S. tech companies in the field. Europe’s wealth of high quality public-sector and machine-readable manufacturing data could serve as grist for AI, an opportunity cited by former European Central Bank head Mario Draghi as an area where Europe could compete with the U.S. and China in the AI field.

Huang and Merz said AI was an opportunity for Germany’s so-called “mittelstand,” the hundreds of small- and medium-sized companies in highly specialized industrial sectors.

Merz is struggling to revive growth in Germany after years of near-stagnation after the pandemic. Among the economy’s headwinds are high energy prices after losing cheap Russian natural gas due to the invasion of Ukraine , competition from China in sectors like autos where Germany once dominated, and excessive red tape and permissions that hold up projects for years. All that has put a damper on an economy heavily oriented toward building complicated machines for export, including cars, trains, aircraft and factory equipment.

Europe lags the U.S. in building out the data centers that offer the massive computing capacity to train artificial intelligence applications, and faces concerns over the security of European companies’ sensitive data against subpoenas and criminal warrants on servers owned by U.S. companies and thus exposed to the U.S. legal system even if they’re in Europe.

Huang appeared to address such concerns by urging Germany to import AI technology but adding that “you should not export your culture, export your values, export your knowledge.”Huang said Germany should “take advantage of artificial intelligence. Let them codify, let them program, let them teach this artificial intelligence and keep it here in Germany, and let’s re-engineer, the chancellor’s words, Germany. This is your chance to do it.”