Supply chain executives across industries are accelerating investments in generative artificial intelligence this year, with more than half redirecting funds from other resources to capitalize on the technology's ability to automate complex logistics operations and predict disruptions before they occur.
The shift marks a transition from experimental AI pilots to practical deployment, as companies seek to harness generative AI's capacity to process vast datasets and generate autonomous solutions for inventory management, demand forecasting, and risk mitigation.
Recent research shows 53% of supply chain and procurement executives are shifting funds to support generative AI initiatives1. The investment surge reflects growing confidence in the technology's business impact, with organizations heavily investing in AI-enabled supply chains achieving revenue growth 61% greater than their peers, according to IBM Institute for Business Value research2.
The results are already materializing. Seventy percent of executives report that generative AI has improved their supply chain interactions, while 76% of Chief Supply Chain Officers expect AI agents to improve process efficiency by 2026 through automating repetitive tasks faster than humans2.
Companies are deploying generative AI beyond basic automation into sophisticated decision-making roles. Microsoft's Dynamics 365 Copilot represents one of the first direct implementations, gathering supplier-related news about natural disasters and geopolitical situations, then generating targeted emails to suppliers using Azure OpenAI Service1.
Amazon uses advanced AI algorithms to forecast demand across its warehouse network, analyzing historical sales data alongside customer behavior and external factors like holidays1. The system predicts product demand at specific times, enabling efficient stocking while avoiding costly stockouts during peak periods.
Generative AI applications now span route optimization, where systems evaluate traffic patterns and weather conditions in real-time2, to scenario simulation that helps companies prepare for geopolitical events and natural disasters2. The technology's ability to create synthetic data allows organizations to plan for rare events they've never encountered3.
The global market for generative AI in supply chains reached $932.02 million in 2025 and is projected to grow to $27.44 billion by 20341. Supply chain officers expect the technology to optimize or automate between 26% and 50% of current procurement processes within three years1.
However, concerns around data accuracy, bias, and security remain top challenges for organizations as adoption accelerates2. "The ability to monitor and analyze supply chains in real time has already unlocked considerable value for forward-thinking organizations," said Jeff Alpert, founder and CEO of Pillar AI3.
