General Electric Co will invest $20 million in digital development over the next two years in China with the help of a Digital Foundry workshop that the U.S. firm launched in Shanghai yesterday.
The $11 million workshop plans to incubate startups and have developers work on new software applications to make machines more intelligent.
The move is part of GE's plans to lead a productivity revolution in global industry by combining machinery with analytics, after selling off its financial assets and embarking on a major restructuring.
Chief Digital Officer Bill Ruh said the world's biggest maker of jet engines and diesel locomotives had already made $500 million in productivity savings for itself this year by using smarter machines, and he expected this to grow to $1 billion in total by 2020.
GE is investing $500 million annually in software as part of the digital drive, and Ruh said the company expected the products to bring in about $6 billion in revenue this year.
In September, it said its portfolio of software-related products would yield more than $5 billion in revenue in 2015, swelling to more than $15 billion by 2020.
GE yesterday also announced a partnership with Huawei Technologies Co, which will see the Chinese communications technology firm adopt GE's industrial cloud-based platform Predix, which is already used by China Eastern Airlines Corp, China Telecom and on Tianjin city's street lamps grid.