Agentic AI was a theme of the 2025 IAA Munich Auto Show. We covered a Qualcomm/Google collab, but we stopped by the CerenceAI booth to learn about some exclusive features of its AI agent product, which has been built in collaboration with Microsoft, leveraging that company’s big enterprise Azure cloud service.
Cerence: Early AI Pioneers
Supplier CerenceAI was spun out of Nuance Communications, an early speech-recognition company that has provided and supplied not only most automakers but also most of the Tier 1 suppliers as well. The end result is that its technology now resides in about half of all new vehicles. Artificial intelligence relies on “large language models.” These are literally the basis of speech-to-text or voice control of anything, so CerenceAI is kind of a ground-floor player in this area with what has now evolved into its Conversational Large Language Model (CaLLM) AI agent.
An Evolving Landscape
Speech recognition started out in a time when vehicle connectivity was less robust, so it endeavored to house all the necessary data and computing power onboard. Then, as connectivity improved and the industry demanded better speech recognition (requiring more data and computing power), these operations moved to the cloud. Now, as onboard computing power has become more affordable and connectivity and cloud services have improved, the industry is heading for a hybrid setup with as much onboard data and computing power as possible (referred to as “edge computing”), backed up by cloud connectivity.
Model/Service Agnostic
CerenceAI’s CaLLM product provides the “special sauce” software that allows any large language model to operate based on conversational inputs in multiple languages, accents, etc. The software can be applied to any large language model, CerenceAI’s own or those of a third party. Similarly, it can run on whatever system-on-chip (SoC) an automaker prefers, connecting to any cloud service it chooses.
Microsoft as CoPilot
Now as Agentic AI is becoming “a thing,” CerenceAI reckoned that what customers might value most was the ability to check their calendar and navigate to addresses associated with appointments, dictate quick replies to emails and chat messages, and join web meetings—all while keeping hands on the wheel and eyes on the road. Since a huge number of said customers work for larger enterprises invested in the Microsoft suite of business products like Outlook and Teams, CerenceAI has collaborated with Microsoft for its in-vehicle agent.
Azure Only
Microsoft Azure is the cloud service that enables the file mirroring that allows you to close a Microsoft Word or Excel file on your computer, then use your phone or tablet and MS365 CoPilot to open the same document. Only “trusted devices” on which MS365 has been logged on can access this information. CerenceAI is making it possible to entrust your car, while excluding operations or services that would be risky in a moving vehicle.
Onboard Secretary/Personal Assistant
This system is designed to read emails or Teams chat messages aloud and allow dictation of replies. You can ask things like “What’s on my schedule today?” Or, “What have I missed over the last two hours?” and it will catch you up. Obviously the visual component of Teams meetings, screen sharing, etc. is all forbidden, and you won’t be building PowerPoint decks or manipulating Excel spreadsheets on the go, but this is a big step toward CerenceAI’s stated goal of using AI to do more than just “push buttons.”
Making Your Car Your PAL
One neat demonstration involved the driver asking “Hey Cerence, do you know what it means to ‘arrive in style’?” The system read back the typical Wikipedia type answer to this question, after which the driver said: “Hey Cerence, when I say ‘I want to arrive in style,’ I mean I’d like to arrive with the windows down, sunroof open, and my favorite song playing.” And from then on, that word sequence prompted those actions.
Another distinction CerenceAI and others at IAA Munich 2025 stressed to make between AI agents and simple voice recognition is its ability to retain context and maintain an ongoing conversation. The AI agent retains the vehicles’ various drivers’ likes, dislikes, and habits, supporting them on every drive. This dovetails with the increasing personification of AI agents, giving them expressive faces that look at the speaker, blink their eyes, blush, dance to music, etc.
New Revenue Opportunities
Here’s the real motivation. CerenceAI reckons that its MS365 integration offers a compelling service that has not been available to date, and hence would be valuable as a subscription service. On the slightly bleaker side, AI agents with personal connections to their drivers might be conveniently positioned to suggest they visit franchises with which the OEM may have co-branding or licensing agreements, or at least report when the vehicle has navigated them to it, in order to drive a revenue share—with or without the customer’s knowledge.
Bottom Line:
Your next new car is likely to try harder to be your pal than your last one. It is also likely to make your life easier in a lot of ways, and it’s almost sure to offer you new services you’ll eagerly pay for. Just know that you’ll never be able to know for certain that it didn’t have ulterior motives.
