AI Impact Awards 2025: Mercedes-Benz redefines luxury in its new vehicles

A new generation of Mercedes-Benz vehicles allows owners to experience the benefits of artificial intelligence (AI) as part of their daily life. Starting with the CLA-Class model, Mercedes-Benz's next-generation MB.OS infotainment operating system will incorporate AI search results, customizations and recommendations.

"We will excite our customers with a full rollout of uncompromising cars. They will be an intelligent part of their life. All of them come with a fully integrated tech stack and leverage the latest developments in AI," Markus Schäfer, member of the board of management at Mercedes-Benz Group AG and chief technology officer for development and procurement at Mercedes-Benz, said during the company's Capital Markets Day presentation earlier this year.

"The CLA represents our first software-defined vehicle – the cleverest car we've ever made, so it made perfect sense to showcase what's possible when AI is built into the foundation rather than added afterward. We're not just launching a new car – we're introducing a new category of vehicle that learns, adapts, and grows with you. The CLA gives us the perfect platform to demonstrate that luxury isn't just about materials and craftsmanship anymore – it's now also about intelligence that understands you," Magnus Östberg, chief software officer at Mercedes-Benz AG, told Newsweek.

Mercedes-Benz has been utilizing AI in various projects for decades, dating back to 1996 when machine learning was first introduced into vehicles. "We actually have been building toward this moment since we established our Silicon Valley R&D hub in 1994 – 30 years of preparation. The technology has finally caught up to our vision. We're not chasing AI trends; we're delivering capabilities we've been developing for decades. Plus, with over 3 million vehicles already using our AI features (ChatGPT), we've proven that we can deploy this technology at scale, not just in concept cars," Östberg said.

Mercedes-Benz is the winner of Newsweek's AI Impact award in the category of Best Outcomes, Automotive/Transportation UX Systems for the luxury experience it offers owners by utilizing AI to transform vehicles into empathetic, hyper-personalized assistants. It was recognized as one of 38 winners of Newsweek's AI Impact Awards 2025 across more than a dozen categories recognizing excellent across a number of industries.

"Luxury used to be about what your car had – now it's what it can do for you. True luxury means technology that disappears into the background until the exact moment you need it, then delivers precisely what you want. The process is invisible, seamless, and secure, providing fast and accurate answers every time. It's the difference between owning a sophisticated machine and having an intelligent and empathetic companion," a Mercedes-Benz spokesperson said.

Modern Mercedes-Benz vehicles are a combination of intelligence and emotion. They are created with quality, safety, comfort and design in focus. Three types of AI carry the baton from that point: conversational, behavioral and agentic.

Conversational AI allows MB.OS to have natural conversations with users. Behavioral AI delivers a proactive user interface experience with personalized recommendations and next-level automated driving. Agentic AI takes it a step further with hyper-personalized user experience.

As more AI-enabled functionalities are brought to market, Mercedes-Benz vehicle owners can rest assured that the company has put privacy and safety at the forefront, keeping full control over all data, customer interfaces, sensors and actuators.

The hyper-personalized and immersive experience that MB.OS allows comes courtesy of the implementation of ChatGPT and Google Gemini. ChatGPT powers the natural dialogue functionality of the system, while Gemini provides conversational navigation about location details like restaurant ratings and popular dishes. MB.OS selects the best agent based on the voice prompt given by the user, in the back end.

MBUX Surround Navigation includes spatially aware navigation details that are technologically layered on top of conversational navigation information. It offers best-in-class Google and AMAP routing and is also updatable in nearly real-time.

AI allows MB.OS users to have conversations with their car's computing system, with contextual memory. The software has an awareness of previous exchanges in order to refine query results. Further, AI enables an owner's car to learn their preferences and generate query results based on those.

Unlike many competitors' AI-enhanced technologies, MB.OS provides a seamless connection between an AI assistant and the vehicles' complex systems. Users can utilize the technology to adjust climate control, interact via voice and control ambient lighting, among other functions.

"Mercedes-Benz sees artificial intelligence (AI) as a groundbreaking technology and an opportunity for even more innovative products, processes and services. We have been using AI for many years in various projects along the entire value chain to improve products and processes as well as to automate repetitive routine tasks or support creative tasks. The goal: to continuously offer better solutions for our customers, to make the everyday work of our employees easier and to strengthen our competitiveness," Östberg said.

Other Places Where Mercedes Is Using AI

The company plans to utilize AI more extensively in its manufacturing operations in the future. By adopting a digital-first approach, the company will use digital twins to allow greater production plan flexibility, easing obstacles in production ramp-up times and retooling ahead of implementation, lessening the interruption of real-world production.

AI will be used to streamline processes, building on the 19 percent reduction in fixed costs that the company achieved between 2019 and 2024. An additional 10 percent reduction is expected in the next three years.

Additionally, Mercedes has adopted AI-enhanced Apptronik Apollo humanoid robots to perform some manufacturing tasks. Initial testing with Apollo focuses on production, with the robots performing repetitive tasks within internal logistics operations, transporting components or modules to the production line. The company's skilled human workers then assemble and conduct initial quality checks on the transported items.

To see the full list of AI Impact winners, visit the official page for Newsweek's AI Impact Awards.

Newsweek will continue the conversation on meaningful AI innovations at our AI Impact Summit from June 23 to 25 in Sonoma, California. Click here for more information and to register for the event.