BMW i Ventures Secures $300M Fund as Mercedes‑Benz Targets On‑Device AI by 2026

*TL;DR – BMW i Ventures raised $300 million for its third fund, bringing assets to $1.1 billion; Mercedes‑Benz will embed on‑device AI from Liquid AI in its U.S. vehicles starting in the second half of 2026.*

Context European premium automakers are layering artificial intelligence across factories, supply chains and the cars themselves. AI monitors production lines in real time, flags welding defects, and routes parts without human input. The same technology can run inside a vehicle, processing voice commands and sensor data locally, without relying on cloud servers.

Key Facts - BMW i Ventures announced a $300 million third fund, raising total assets under management to $1.1 billion. The fund targets physical AI, industrial software, supply‑chain tech and advanced materials, investing from seed to Series B in North America and Europe. - Mercedes‑Benz entered a multi‑year partnership with Liquid AI to embed the Liquid Foundation Models directly into its North American vehicles. The on‑device system will power the MBUX Virtual Assistant with faster, private AI that does not depend on cloud connectivity. - Production deployment of the Liquid AI‑powered system is scheduled for the second half of 2026.

What It Means BMW’s new capital pool signals confidence that AI‑driven components will become core automotive suppliers. By backing startups early, BMW aims to own the technology that will shape future factories and vehicles. Mercedes‑Benz’s move pushes AI from the back‑office to the driver’s seat, offering real‑time, offline intelligence that could improve safety, personalization and data privacy. Both strategies reflect a broader industry shift: AI is no longer an add‑on but the coordination layer that replaces manual oversight across order‑to‑delivery chains. As European brands race to match software‑native rivals from the United States and China, the next few years will reveal which AI investments translate into market advantage.

*Watch for the first Mercedes‑Benz models equipped with on‑device AI in late 2026 and for BMW i Ventures’ portfolio startups entering production lines in 2025.*