Volkswagen to Keep Dresden Site Open as AI, Chip Tech Center

Volkswagen AG plans to convert its small-scale assembly plant in Dresden into an innovation hub after stopping car output, following through on a pledge to avoid factory closures in Germany.

The German carmaker signed an initial agreement with the state of Saxony and the city’s Technical University to develop a startup and research center with programs in artificial intelligence, robotics and chip design. VW and the university plan to invest more than €50 million ($58.3 million) at the site over the next seven years, the company said Thursday.

VW last year confronted powerful labor unions in Germany with plans to ...