As the automotive industry moves from software-defined vehicles to AI-defined vehicles, ETAS President Thomas Irawan believes the fundamental direction remains unchanged. What has changed is the speed of innovation—and the growing importance of ecosystem collaboration. In a recent conversation with Gasgoo, he shares his views on AI, software complexity, China’s role as an innovation hub and the globalization of Chinese automakers.

AI Is Redefining How the Automotive Software Industry Works

“What has really changed is not the direction, but the speed.”

That is how Thomas Irawan, President and Chairman of the ETAS Board of Management, summarizes the transformation currently underway in the automotive industry.

Just a few years ago, the industry was still debating when software-defined vehicles (SDVs) would become reality. Today, fueled by rapid advances in foundation models, generative AI and AI agents, the conversation has shifted toward AI-defined vehicles (AIDVs).

Yet, according to Irawan, the industry’s underlying trajectory has not fundamentally changed. The vision outlined during the SDV era is becoming reality, while AI is accelerating the pace at which that vision is being realized.

He points to what he calls the “ChatGPT moment” as a key turning point. Since then, AI capabilities have advanced at an unprecedented rate, with increasingly powerful AI models emerging in rapid succession. The impact is already visible in software development, where AI tools can now assist with architecture design, coding, testing and documentation—tasks that once required years of experience and specialized expertise.

For Irawan, AI is not simply another technology trend. It is reshaping how software is built, how organizations operate and how talent is evaluated. As AI takes on more development tasks, future competitiveness will depend less on coding skills alone and more on the ability to leverage AI effectively to create value.

At the same time, ETAS is seeking to strike a balance between speed and governance. While global standards remain important, Irawan believes excessive standardization should not slow innovation. Instead, companies should focus on establishing clear principles—particularly in safety-critical applications—while allowing teams to move quickly and take advantage of new AI capabilities.

Managing Complexity Through Collaboration and Ecosystem

While AI is transforming development, it is not the only force reshaping the automotive sector.

Modern vehicles require ever-larger software stacks, more sophisticated architectures and tighter integration across systems. As vehicles become increasingly software-centric, the industry is facing another challenge: managing ever-growing software complexity. Drawing on his background in physics, Irawan compares this trend to entropy.

“Complexity never disappears. It only increases.”

For automakers and technology suppliers alike, the challenge is no longer eliminating complexity, but managing it effectively. This is where ecosystem collaboration becomes critical.

Over the past several years, many automakers—particularly in China—have invested heavily in software self-development. While that strategy has accelerated innovation and helped companies move faster, Irawan believes the industry is gradually recognizing that not every software layer creates competitive differentiation.

He argues that fragmentation, rather than complexity itself, is the industry’s biggest cost driver. Repeatedly developing non-differentiating software components across the industry creates unnecessary inefficiencies and slows progress. Instead, shared foundations in areas such as basic software, middleware and common platforms can free automakers to focus on customer-facing innovation and differentiated experiences.

As a result, the debate is no longer about self-development versus outsourcing. Instead, it is about identifying which capabilities should remain strategic and which are better addressed through collaboration.

ETAS aims to contribute to this evolving ecosystem by helping customers manage complexity and by serving as a bridge between local and global partnerships.

China as an Innovation Laboratory

For Irawan, few markets illustrate these industry shifts more clearly than China.

“We see China as an innovation laboratory because most new things emerge here first.”

From AI adoption to new vehicle concepts and business models, Irawan views China as one of the most dynamic automotive markets in the world. He is particularly impressed by the speed at which Chinese automakers operate—from decision-making and development to iteration and product delivery.

That pace, he believes, is increasingly influencing the global automotive industry.

As more Chinese automakers expand internationally, both Chinese innovation and what Irawan calls “China speed” are gaining a broader global stage. While Chinese companies have demonstrated strong product innovation and development efficiency, international growth also requires navigating diverse regulatory, safety and compliance requirements across different markets.

This is where global technology partners can create significant value. Leveraging decades of experience in automotive embedded software, cybersecurity solutions, consulting and engineering services, ETAS is supporting Chinese automakers as they adapt to global market requirements and accelerate their international growth.

Looking ahead, China remains central to ETAS’ strategy. The company aims to further strengthen its presence in the market, integrate AI across its products and operations, and continue searching for the next major breakthrough in automotive technology.

For more insights from the interview, please watch the video above.