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Jeff Immelt, GE chairman and CEO, recently sat down with CNBC host Jim Cramer to talk about GE’s transformation into the world’s largest digital industrial company. Here are the highlights from the interview.

Cramer started by asking Immelt about turning GE into a “top 10 software company” by 2020. Immelt explained that jet engines, medical scanners and other industrial machines GE sells are already full of sensors that gather large amounts of data. “Seven years ago, we kind of got started as a way to protect our installed base, to grow our service business,” Immelt said. Today the company is “kind of half the way to our goal to be $15 billion [in digital orders] by 2020,” he said.

GE has 28,000 people working on digital projects, and Immelt said that orders were growing 25 percent a year. “We’re kind of first among equals in the Industrial Internet,” Immelt said. “We can play, we can do this.” He added: “Every industrial company is going to have to stake its digital claim about how you do a better job with customers, how you drive cost down, and we can lead this.”

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Above: Arterys is using data generated by GE MRI scanners to see the heart in seven dimensions — three in space, one in time, and three in velocity direction. The system allows physicians to see actual blood flow in the heart as a 3D image. This picture illustrates speed and direction of blood flow with color-coded vectors. Image credit: Arterys. Top: GE wants to build a digital model, or twin, of every GE machine, from a jet engine to a locomotive, and use it to use to anticipate maintenance needs and outages, measure performance and test different operating modes. Image credit: GE Digital

Immelt told Cramer the current size of the digital market was $100 billion. “It’s a big idea,” he said, adding that software can optimize assets as diverse as jet engines, pipelines and MRI scanners. Immelt acknowledged that there will be “a ton of competitors.” But GE also has “$225 billion of contractual agreements already signed with customers that are productivity-based,” he explained. “So we have this kind of connection with customers that nobody else really has, and we can add analytics on top of that in ways that IBM and Siemens can’t do.”

For example, Immelt said, GE medical scanners generate 45 million images a day. “IBM doesn’t have that, really,” he said. “The Industrial Internet is going to break very differently than the consumer internet or the enterprise internet.”

GE’s deep industrial expertise is another advantage, Immelt said. “What’s hard in this world is knowledge of the assets,” not finding a qualified coder, he said. “What we have that the other guys don’t have is we know the material history of every jet engine, right? We can build digital twins around gas turbines. I think we bring the physics along with the analytics. We can kind of see this happening.”  GE’s operating system for the Industrial Internet, Predix, will be a key driver, he said. “We’ll get a billion dollars in Predix orders this year, so it’s real.”

When asked about GE quickly capitalizing on machine learning and artificial intelligence, Immelt pointed to another example from healthcare. He said that a radiologist uses just 10 percent of what a medical scanner can deliver on the first read. “The other 90 percent can be modeled using AI post-processing,” Immelt said. “We saw that 10 or 15 years ago. So these are concepts that are well known inside the company, and ones we think we can leverage across the installed base.”

You can watch the interview here: