Artificial intelligence (AI) and machine learning are increasingly shaping the manufacturing sector, according to a recent analysis that expands on the 2024 Best Practices for Growing Manufacturing in North Carolina report by the North Carolina Department of Commerce and the North Carolina Manufacturing Extension Partnership (NCMEP). While much attention has focused on AI’s impact on office work, its role in factories is becoming more defined.
Manufacturers are using AI in several key areas: prediction, planning, production, and performance. This includes data analysis to anticipate outcomes and risks, improving business strategy, automating physical processes with robots and cobots, managing product quality through vision systems, and optimizing operational efficiency. One example is the use of “digital twins,” which are virtual simulations of manufacturing processes that allow companies to test systems before actual implementation.
Generative AI (Gen AI), known for creating new content through models like ChatGPT and Copilot, is also finding applications in manufacturing. These include programming software, providing virtual troubleshooting support, optimizing schedules, advising decision-making, and documenting procedures.
Despite these advances, integrated use of AI remains low among manufacturers. According to a September 2025 U.S. Census Bureau survey, only 10% of all North Carolina businesses reported using AI recently in their operations. Among manufacturers nationwide, just 4.8% used AI—well below the adoption rate in industries such as Information Technology.
Interest in AI among manufacturing executives is high. The Manufacturing Leadership Council’s 2025 Future of Manufacturing Project found that while daily use is limited on factory floors, many senior leaders are developing or implementing AI strategies. A majority of companies have either an existing strategy (18%) or one in development (42%). Looking forward, 92% of manufacturers believe AI will affect their competitiveness; 68% consider it essential for growth; and 61% plan to increase investments in AI over the next two years.
Traditional AI tools such as vision systems remain most common in manufacturing settings. However, technologies like large language models (LLMs), chatbots, natural language processing (NLP), and edge AI—which allows real-time processing on local devices—are expected to see significant growth as adoption increases.
The impact of generative AI on production workers may be less direct compared to its effects on white-collar roles such as business operations or technical programming. Still, automation powered by AI could accelerate changes for jobs related to production, repair, maintenance, and technical support. Previous research by LEAD indicates that North Carolina’s workforce faces greater exposure to automation-related changes than the national average due to its sizable manufacturing sector.
A national survey by the Manufacturing Leadership Council in 2024 found that most manufacturers do not expect overall job losses from increased AI adoption: 45% predicted no change in headcount while 32% anticipated growth by 2030. However, about one-fifth foresee reductions in total jobs at their companies because of these technologies. Nearly all respondents (95%) expect to retrain or reassign some employees due to rising use of AI—with more than a third predicting this will affect at least 10% of their workforce by decade’s end.
Given these trends, economic and workforce development professionals in North Carolina are encouraged to engage closely with manufacturers to understand how technology is being implemented across sectors. They can serve as connectors between small- and mid-sized firms and technology providers; help companies reskill affected employees; and assist workers who need to transition into new roles inside or outside their current employers.
The report notes that technological innovation has always been part of manufacturing’s evolution—creating both job losses and new opportunities over time. By applying lessons from past transitions, North Carolina aims to help businesses manage future challenges associated with Industry 4.0 advancements like artificial intelligence.
