The moment is right, and resources are aligned to build a global manufacturing AI center of excellence here. The question is whether we’ll seize this opportunity or let it slip away once again.
I was on the Journal Sentinel team that won a 2011 Pulitzer Prize for our story about a Medical College of Wisconsin team that sequenced for the first time ever all of a patient’s genes for diagnosis. Six years later, when our book, "One in a Billion: The Story of Nic Volker and the Dawn of Genomic Medicine" was published, the Medical College hadn’t built on this historical achievement and, in fact, had lost most of the team that worked on it.
There was another chance with TomoTherapy, the company built on UW-Madison medical physicists’ new and better radiation therapy system. TomoTherapy went public in 2007, but was acquired in 2011 by Accuray, a California company whose technology wasn’t as good. That time the team stuck around, but the company left. A different twist on the same story.
Time and time again, we get a foothold in a trending technology, maybe even launch a company, then watch the potential to leverage it into something bigger evaporate.
This time should be different.
Maybe you’re thinking the key to becoming a manufacturing AI powerhouse is Microsoft’s $3.3 billion Racine County data center complex. Nope.
Data centers are server warehouses that support AI, nothing more. And they’re ubiquitous. Iowa, with its cheaper electricity prices, has 56 data centers. It would take a long time to catch up -- and I’m not sure why we’d even want to try.
AI innovation lab at UWM presents a big opportunity
The real opportunity, and the heart of this matter, lies in the Microsoft AI Co-Innovation Lab taking shape at University of Wisconsin-Milwaukee.
At the lab, Microsoft’s AI experts and developers will help manufacturers and supply chain companies design and prototype AI and cloud solutions.
This is Microsoft’s third such lab in the U.S. and seventh in the world -- and the only one focused on manufacturing. It’s set up to help companies automate production processes, better collect and analyze data and find new business opportunities and markets. Imagine the competitive advantage with an AI system that detects a predicted snowstorm along a key route and suggests ordering critical components ahead of schedule.
But remember, we’ve got this habit of failing to build on top of good starts while others move forward.
Without strategically connecting local resources and developing a robust, shared platform, there’s no far-reaching, lasting economic growth. No rising standard of living. No one plus one equals five.
Key local partners have lined up to help fund lab
Some local organizations that should be part of building our manufacturing AI ecosystem are obvious and thankfully they’re involved.
Microsoft and the Green Bay Packers partially fund the lab. Wisconsin Economic Development Corp. (WEDC) is providing $1.1 million: $600,000 for TitletownTech and $500,000 for UWM to build out space in its Connected Systems Institute (CSI).
CSI, which is focused on advanced manufacturing, is headed by Joe Hamman, previously a senior director at Regal Beloit Corp. And here’s a key detail: Rockwell Automation is a founding partner of CSI.
Building momentum requires technology and domain expertise, plus significant collaborative innovation – solo performances won’t get the job done.
Microsoft has technology expertise. And Rockwell, the world’s largest company focused on industrial automation and digital transformation, has the all-critical domain expertise. The two companies last month announced an expanded strategic collaboration that offers manufacturers advanced cloud and AI products to capture critical insights without extensive retrofitting, enable use of natural language prompts for code generation and troubleshooting, and more.
TitletownTech will help recruit companies, projects
Now add TitletownTech, which will recruit companies and help them prepare projects for the AI lab, and you’ve got the magical piece that so often eludes us: the ability to drive more collaborative innovation.
TitletownTech, the $95 million venture firm launched by Microsoft and the Packers in 2019, has built a collaborative network of 27 corporate venture partners, more than half of whom engage with its portfolio companies. They provide feedback, test new ideas, co-develop technology, become pilot customers and/or invest resources and capital. Amerilux International, for example, has worked with three of Titletown’s portfolio companies. Schneider National also has worked with several, and in 2022 led a funding round for ChemDirect. This is new to mainstream Wisconsin venture capital.
And it’s a great way to accelerate development and commercialization to achieve first mover advantage. Microsoft’s AI lab isn’t just a place where companies can work on new technologies; it’s a place where they can connect into a network that helps them evaluate commercialization models, identify early adopters, engage strategic partners, and examine funding options.
Kathryn Clouse, who was senior manager, transformative innovation at Kohler Corp. and senior design engineer at Pierce Manufacturing, will lead Titletown’s work at the lab.
Microsoft’s AI lab won’t be for everyone. Some companies, victims of the “not invented here” syndrome, will continue to over-value internal ideas and dismiss new, outside ideas. Others won’t want to commit to Microsoft Azure as their cloud platform, despite Microsoft’s commanding lead in generative AI.
And many will wrestle with a gnawing question: Who owns the data that comes to the AI lab? Typically, companies own their data unless they sign agreements giving it to the service provider, say for extended hours for analysis or other work.
Microsoft’s AI Co-Innovation Lab and the ecosystem developing around it represent an ambitious undertaking with no guarantee of success. But this is an opportunity to change the narrative from “win-lose” to “win-win.”
If it works, we’ll have a manufacturing AI center of excellence, a model for company engagement with startups that drives later-stage funding, and a shining example of cooperation that improves our state and region’s economic competitiveness and prosperity.
Kathleen Gallagher was a business reporter at the Milwaukee Journal Sentinel and the Milwaukee Sentinel for 23 years. She was one of two reporters on the team that won a 2011 Pulitzer Prize for the One in a Billion series. Gallagher is now executive director of 5 Lakes Institute, a nonprofit working to grow the Great Lakes region's high technology entrepreneurial economy and culture. She can be reached at Kathleen@5lakesinstitute.org.
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