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Unlocking Efficiency: AI and Digital Engineering in Aerospace & Defense

February 9, 2026
Hear from Microsoft and PTC leaders as they reveal how AI and digital engineering drive efficiency, agility, and innovation in aerospace and defense product development.

00:00 Hi, I'm Rupert Stutzel, I lead the industry team for the manufacturing and mobility industries in EMEA at Microsoft. And I'm Steve Dertien, and I'm the Executive Vice President for Technology and customer partnerships. If you think about digital tools, obviously we've used digital software and spreadsheets and other ways of communicating, but when you really think about all the different dimensions that go into product development these days, you know, how do we actually square off the customer requirements, some of our vendors, details that come in to us as requirements, or requirements that we might have on them, and keep track of all of that,

00:32 the test cases and the ability to effectively move with speed. How do we make decisions on the things that we're contributing into the overall product development cycle with good clarity and execution. Digital engineering can help speed up development in multiple ways. Number one, it will help automate menial tasks, mundane tasks, and thus get faster. But also it will help connect the different steps of the development process through a digital thread to make sure that we don't just have little isolated

01:04 development steps, but connect them and in the end, get to a digital twin end-to-end and also, virtualize the processes. Thus, to speed up the development cycles in a more agile way. With our aerospace defense customers, the impact here is pretty profound in terms of complexity, right. Whether it's regulatory, just the sheer complexity and the safety critical aspect of the products, the amount of product variations that need to be had and how much software actually goes into those, and how do you manage across those? And then what customers actually individually want from product development

01:35 in these companies. And so when you mix all of that together, add in some of the supply chain complexity with some of the electronics components and the way that software implicates itself in that, you have a kind of a large mix of, of things that need to be managed by a company in order to effectively put an awesome product out to the market. AI impacts software engineering for every step of the software development process. In fact, now we can fully automate software development without really the need of writing code.

02:06 Starting with creating a plan with requirements engineering up to creating tests and pull requests, everything can be assisted and we see overall, an effect of an efficiency increase of around 50% on average. So very powerful impact that we can see in software engineering. AI is really a driver for helping take, you know, kind of our language, the way that we describe how products are actually built, designed, what are the specifications of them, the details, you know, if we can actually process through that, help

02:37 manage the regulatory burden, maximize reuse, actually, if you think about the amount of data that we actually create, do a save as, you know, similar to, you know, can we really look through the system in a way and have AI do a lot of that automated work. It can really just boost the overall productivity. That's just on the system engineering side. When you get into the other aspects of engineering and you say, what's that impact of change going to be? What's the impact of this supplier's decision going to be on the overall engineering choices that are being made on this product?

03:07 Those are profound in terms of like how much time it actually takes any particular company to decide. I think that's where, you know, we're finding opportunities 20, 30, even 40% boost potential inside of companies through the use of AI for product development. It's great to see how along the systems engineering process, applying sort of the technical foundation that we provide with the toolchain that PTC provides and applying AI and generative AI functionality on top, how that can help deal with requirements,

03:37 deal with the need to speed up the development process.

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