During my academic career I worked at a top German research university and advised multiple of these projects. On the surface it’s a good deal for everyone: the professor gets increased publication and graduate counts without having to pay for it, the company gets a top student working on their research problem very cheaply, and the student gets a PhD, an employment contract, and often a visa.

The reality was unfortunately often not so great. What would happened is that the student would get 3-4 year contract with 50% allocation to the PhD research in addition to normal employment duties. That is not enough to graduate if the professor has high standards.

As a result, the student would transition to full time employment after the 3-4 years, try to work on research in the evenings, and give up after some time. Or they would graduate with a very low quality degree (I saw students graduate with a 0 or 1 publications and a very thin dissertation) that has practically no value to anyone beyond providing the student with a Dr. title.

In the end I was actively advising students against it, and to just go into industry with a masters degree or find a fully academy funded PhD position if they are serious about research.

While I understand the upside, the reality of why it’s being pursued in the United States is that this is intended to drive academia into an advanced version of a trade school.

This is just because of the PhD inflation in Germany. It has little scientific value.