* Siemens CEO says customers delaying new projects

* Siemens expands industrial AI partnership with Alibaba

* Chinese open-source AI models praised for being

cheaper, more customisable

By Laurie Chen

BEIJING, March 23 (Reuters) - German industrial giant

Siemens said on Monday that the Iran war has led to

customers holding back on new investments as prices increase for

raw materials and energy.

The war has nearly halted shipping through the Strait of

Hormuz, which handles about 20% of global oil and liquefied

natural gas flows, as well as damaged major energy facilities in

the Gulf. Brent crude futures have jumped 56% since the

start of the conflict.

"Growth is throttled because of price increases. You see ...

customers holding back their investments. For example, oil and

gas customers or petroleum customers who were planning maybe a

new plant... so it means investments are slowing down," CEO

Roland Busch told reporters on Monday.

Busch was speaking on the sidelines of the annual Siemens

Tech Summit in Beijing, where the company announced it would

expand its industrial artificial intelligence partnership with

Chinese tech giant Alibaba.

Siemens will provide 26 new services spanning industrial

infrastructure, automation and AI-powered applications to

Alibaba Cloud customers.

But Busch noted that some Chinese partners have been

reluctant to share real-world factory data crucial for training

and fine-tuning its models due to concerns about IP issues.

"Most of our foundational models, they are so far trained on

publicly available data, they haven't seen industrial data yet.

This is a big step up to tune models," he said.

"We want data to travel across borders and the Chinese

government, at least for industrial and machine data, has

allowed the possibility (for data) to travel across borders."

China has imposed strict cross-border data transfer laws for

national security purposes, but some European firms have been

granted exemptions on a limited case-by-case basis.

Busch said Siemens developers prefer to use Chinese

open-source AI models over their closed-source U.S. rivals for

certain tasks related to training industrial AI models because

of their cheaper token cost and customisable parameters.

A token is the smallest unit of data processed by AI models.

Six out of the top ten most widely used large language

models worldwide are Chinese, according to the token usage

ranking scoreboard of OpenRouter, a unified public interface for

AI models.

Some Western think tanks have warned about the security

risks of reliance on Chinese open-source models, as well as

their political bias towards Chinese government positions.

Chinese open-source AI models, led by Qwen and DeepSeek,

have gained significant traction in the U.S., with some

estimates suggesting that around 80% of U.S. AI startups now use

them.