Firing on all cylinders: The next wave of AI in manufacturing

Manufacturers are going full speed ahead on AI as organizations continue to rev up their investments and returns — supercharged by the emergence of AI agents.  After proving the value of generative AI in 2024, the manufacturing industry is poised to go even bigger: 2025 is all about building on last year’s momentum to drive even more value. 

Our second-annual ROI of AI in manufacturing report, commissioned by Google Cloud and conducted by National Research Group, confirms that AI initiatives are still delivering, with 78% of executives reporting their organization is already seeing returns from their gen AI investments. The survey also revealed a powerful new differentiator helping drive this momentum: AI agents — specialized large language models (LLMs), that can independently plan, reason, and perform tasks.

The findings are based on a survey of 517 global manufacturing leaders with generative AI deployment within their organizations, including C-suite and senior executives across IT, marketing, and innovation functions.

For all the insights, take a deep dive into the full report (and compare it to last year’s survey). Below, you’ll find the key takeaways on how manufacturers  are capturing new value and opportunity with AI to help inspire your own strategies. 

1. The agentic AI tipping point in manufacturing is here. 

Agentic AI has arrived, fundamentally reshaping how manufacturers are investing in the future and marking a profound shift towards autonomous workflows. Specifically, sophisticated, multi-agent systems can securely connect with enterprise data and other AI agents, enabling them to take actions on behalf of users, under supervision. 

According to the survey, 56% of manufacturing executives reported their organizations are actively using AI agents, with 37% reporting they have launched more than ten. AI agent adoption is also growing in core business processes, such as quality control (54%), production planning (48%), supply chain and logistics (47%), and factory and production (46%), indicating the potential for truly differentiating impact in the future. 

The emergence of AI agents is driving the next wave of AI innovation, and business priorities are shifting. Over half of manufacturing executives (55%) stated their organizations plan to allocate 50% or more of their future AI budget to AI agents, underscoring that agentic AI is now viewed as a mission-critical enterprise investment.

2. Agentic ROI is accelerating and shifting focus to core processes. 

This strategic shift is quickly translating into measurable gains: AI agent use cases are already showing returns, with marketing (40%), customer service and experience (38%), and productivity and research (36%) leading the way. However, the biggest ROI opportunities exist in core manufacturing processes, such as quality control (35%), factory and production (32%), and supply chain and logistics (31%).  The value of these core areas — even those with longer implementation timelines — stems from their direct impact on revenue generation, risk mitigation, efficiencies, and ability to compete.

For example, agents can be integrated with vision systems to autonomously adjust machine parameters and correct product defects in real time. AI agents also offer significant potential for assisting with research and development, helping to create novel materials for product design or generate ideas for new product variations. On the factory floor, they can also be deployed to enable plant analytics, automate quality control checks, or automatically optimize processes and workloads to maximize machine effectiveness. They can be used to train new employees or as a companion for debugging machine-related issues.

3. C-suite sponsorship is the primary driver of AI success.

As gen AI continues to mature and proliferate across the industry, organizations are also gaining a clearer understanding of what it takes to not only adopt it — but scale it successfully. 

Our research found that executives from manufacturing companies that have comprehensive C-level sponsorship are significantly more likely to see ROI (84%) compared to those without this level of alignment (75%). Strong leadership involvement will only become more significant as gen AI’s role grows across the entire organization, extending from the factory floor to other areas like marketing, sales, and finance. 

While AI agents represent the new frontier, generative AI continues to deliver value, and strong C-suite involvement will only serve to amplify these gains. Among all respondents, manufacturers reported gen AI’s impact in five key areas:

Productivity: 75% of manufacturing executives reported gen AI has resulted in improved productivity. Among them, 65% cited improved non-IT business process and staff productivity, up significantly compared to last year (56%). 

Customer experience: Some 64% of executives reported gen AI has improved customer experience, with 86% of those seeing gains of 6% or more (up from 81% in 2024) — a sustained advantage compared to other sectors. 

Business growth: A large majority of manufacturing executives (60%) continued to see business growth from gen AI, and within this group 89% of those reporting revenue increases estimated gains of 6% or more.

Marketing: More than half (58%) of all surveyed executives reported that integrating gen AI solutions had a meaningful impact on their organization’s marketing outcomes. 

Security: Manufacturing executives continued to report improved security posture from gen AI, with the majority of those reporting meaningful impact to security citing improved intelligence and response integration (80%), threat identification (76%), and time to resolution (63%). 

In other words, AI success hinges on deep cross-functional collaboration, but it’s top-level support that will truly drive results, aligning AI adoption with business goals and guiding crucial decisions about its fundamental use within organizations. 

4. Data security and governance are fueling AI model provider choices.

For manufacturers, maintaining the highest standards of security is crucial for safeguarding invaluable IP and assets across every touchpoint. Today, companies are facing increasingly sophisticated threat actors employing advanced AI capabilities, which require embracing new, AI-specific methods in addition to traditional security approaches.  In particular, leaders are highly concerned about the potential for threat actors to gain access to data and addressing other potential risks, such as hallucinations or data poisoning. That’s why, leaders are prioritizing the fundamentals even as they move forward with adopting AI. The primary consideration for executives when evaluating LLM providers is data privacy and security (37%), ahead of system integration and scalability and performance.

Looking forward

Ultimately, the survey offers a promising outlook for the future of manufacturing: AI opportunity is everywhere, but the real advantages will go to those organizations that are prepared to act decisively and scale their AI initiatives for maximum impact. Prioritizing agents, securing C-suite sponsorship, and addressing foundational security early on will help pave the way for long-term success.  

Download the full report, “The ROI of AI in manufacturing,” to explore all our latest insights and findings.