Rolls-Royce and the AI gold rush: how smart software is powering an unlikely comeback story

Key points

• Rolls-Royce's share price rose roughly tenfold after chief executive Tufan Erginbilgiç took over, recovering from a collapse during the aviation shutdown caused by the pandemic.
• Erginbilgiç said publicly, about a year ago, that Rolls-Royce could become the most valuable company on the London Stock Exchange.
• The company operates across several high-value industries, which its spread of revenue streams makes unusual for a manufacturer.
• AI-driven tools for predictive maintenance and operations are increasingly how major aerospace firms cut costs and win contracts.

Tufan Erginbilgiç made a bold claim about a year ago. The chief executive of Rolls-Royce, the British maker of large jet engines and power systems, said his company could one day top the London Stock Exchange's value rankings. Most people raised an eyebrow.

The scepticism was fair. When global aviation froze during the pandemic, Rolls-Royce burned through cash at an alarming rate. Its share price cratered, and the company briefly looked like a warning about overdependence on a single market.

Then came the turnaround.

What actually changed?

Erginbilgiç, who took the top job in early 2023, cut costs, sold non-core businesses and refocused on what Rolls-Royce does best: building the enormous engines that power wide-body aircraft and the systems that keep naval vessels and power plants running. The share price climbed around tenfold from its lows.

AI is part of this story, even if it rarely gets the headline. Aerospace and defence companies now use AI tools, meaning software that analyses large amounts of data to spot patterns a human engineer might miss, across maintenance, design and operations. Predictive maintenance is the clearest example: sensors on an engine send readings to an AI system, which flags a likely fault before it becomes a grounding problem. That saves airlines money and keeps Rolls-Royce's service contracts valuable.

Published research from larger rivals and engineering groups shows AI-assisted design can shorten development cycles by months. For a company betting on next-generation engines, that speed matters. We first covered Rolls-Royce's positioning in this space on 30 July 2026, when AI's role in British industrial firms was starting to draw serious attention.

Could it really reach the top of the London market?

Reaching the very top would require Rolls-Royce to keep growing while larger, longer-established companies stall. That's a high bar. But the company's revenue spread across civil aviation, power generation and defence gives it several ways to grow at once, which isn't typical of a manufacturer.

As reported by The Guardian, the idea no longer looks entirely fanciful.

What should ordinary readers watch for?

If you work in aviation or energy, Rolls-Royce's direction matters to your sector. Watch how the company describes AI in upcoming results announcements. Vague talk of "digital transformation" is easy. Concrete numbers tied to engine reliability or contract wins are the real signal that the technology's working, not just being sold to investors.

The honest read here: the AI story at Rolls-Royce is real but secondary. The operational discipline Erginbilgiç imposed is what drove the recovery. AI is the lever that could extend it.