Manufacturers embrace generative AI with cautious investment

As enthusiasm for generative AI transitions from “unbridled excitement” to a more nuanced evaluation of its business impact, manufacturers are making strategic investments in AI technologies.

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According to Deloitte’s 2024 Future of the Digital Customer Experience survey, 55% of surveyed industrial product manufacturers are already using generative AI tools, and over 40% plan to increase their investments in AI and machine learning over the next three years.

Deloitte expects this trend to continue into 2025 and beyond.

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Rather than rushing to implement generative AI solutions, companies are aligning these technologies with broader digital transformation strategies. A 2024 survey by the Manufacturing Leadership Council revealed that 78% of manufacturers view AI as part of their overall digital strategy. As with other technological investments, success will be measured by AI’s ability to deliver tangible value and return on investment (ROI).

How manufacturers are approaching generative AI

High-quality data remains a prerequisite for effective AI adoption. A recent Deloitte survey found that three-quarters of manufacturers are increasing investments in data life cycle management to support their generative AI strategies.

However, challenges persist. 70% of manufacturers reported that issues such as data quality, contextualization, and validation are significant barriers to AI implementation. To address these challenges, manufacturers are encouraged to prioritize use cases where robust data foundations already exist.

Customer service applications are emerging as a leading area for generative AI adoption. These applications benefit from readily available, structured data such as call records, warranty details, and claims information. Deloitte’s survey found that 74% of manufacturers are either using or planning to use generative AI to enhance customer experience. Examples include virtual chatbots for streamlined customer interactions and augmented reality-powered service manuals for efficient remote maintenance support.

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Product design is another promising application. According to the firm IDC, by 2028, 50% of large manufacturers are expected to use generative AI to analyze engineering archives and uncover new opportunities for innovation in legacy products. Connecting these use cases to critical business objectives, such as improving customer experience or driving product innovation, is vital for securing internal support and funding.

As manufacturers navigate elevated costs and economic uncertainty in 2025, targeted AI investments could drive efficiency, productivity, and cost reductions. Surveys indicate that generative AI and machine learning deliver the highest business impact among smart manufacturing technologies, offering substantial ROI second only to cloud and software-as-a-service solutions.

Despite this potential, only 51.6% of manufacturers reported having a corporate AI strategy in place, according to the Manufacturing Leadership Council’s 2024 survey. To maximize the benefits of AI, manufacturers will need to focus on establishing comprehensive AI strategies, governance models, and risk management frameworks.

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