Siemens announced on Wednesday its acquisition of US software firm Dotmatics for$5.1 billion, aiming to enhance its AI capabilities for drug discovery.

The German company described the deal as complementary to its expansion into Life Sciences, positioning itself in a market increasingly reliant on digital transformation to meet growing medical needs.

Siemens expects Dotmatics to generate$100 million annually in the mid-term, rising to$500 million in the long run, and said the acquisition would be immediately profitable. The transaction is set to be completed in the first half of next year.

Founded in 2005, Dotmatics employs 800 people and specialises in AI-driven R&D software designed to accelerate drug research. This move follows Siemens' recent$10 billion purchase of another AI-powered US software firm, Altair Engineering.

As Siemens' industrial software faces slowing demand, its digital division has been driving revenue growth instead of its traditional factory automation products. The company, Germany's second-largest by market value, continues expanding its software portfolio to capitalise on AI-driven innovations.