AI will generate the real world, not just simulate it, says Pascal Daloz of Dassault Systemes

Artificial intelligence may be drafting emails and generating images for consumers, but its role in the industry will be very different, according to Pascal Daloz, Chief Executive Officer (CEO) of Dassault Systèmes.

Speaking at the company’s annual 3DEXPERIENCE World event in Houston, Daloz said the next big shift in AI will happen not on office desks, but in factories, laboratories, and design centres, places where real products are imagined and built.

His central argument was simple: in the future, companies will first create digital knowledge, designs, rules, test results, and engineering experience, and then use that to produce physical objects. AI, he said, will help organise and use this knowledge faster, rather than replacing people.

“The virtual is driving and generating the real,” Daloz said, meaning digital designs are increasingly shaping what gets built in the physical world.

AI as a co-worker, not a replacement

Daloz stressed that AI in industry is not about replacing engineers. Instead, he described new AI systems as “companions” that work alongside people. These tools can help explore ideas, run tests, check designs, and suggest improvements, but humans still make the final decisions.

He compared this to safety-critical fields like aviation, where automated systems exist, but a human remains responsible.

Protecting company knowledge

A major concern he raised was ownership of knowledge. As AI systems learn from company data, questions arise over who owns the insights they produce. Dassault, he said, is building systems that clearly track where knowledge comes from and ensure it stays protected, especially when companies work with many partners.

In simple terms, he argued that a company’s engineering know-how is becoming as valuable as money, and needs similar protection.

Why the cloud matters

Most of these AI tools will run on the cloud rather than on individual computers. Daloz said the heavy computing power required makes shared data centres more practical. This, he added, could help smaller firms access the same advanced tools as large corporations.

He also touched on “digital sovereignty” the idea that countries and companies should have a choice about where their sensitive data is stored.

India’s growing role

Discussing India, Daloz said the country is evolving beyond its traditional role as a hub for engineering talent supporting global operations. It is becoming a major market in its own right as industries such as automotive, aerospace, and machinery invest more in advanced design and manufacturing tools. He pointed to a large presence in Pune and growing demand from Indian companies adopting digital design systems.

For India, which is trying to expand its manufacturing strength, such AI-driven design tools could become as important as physical factories. The competitive advantage, Daloz suggested, will come not only from building things, but from organising and protecting the knowledge behind how they are built.

(The author is in Houston at the invitation of Dassault Systemes)