According to research by AI firm Lucidworks, manufacturers have deployed only 20% of planned AI initiatives. And less than 60% of manufacturers plan to increase AI spending in 2024 compared to 93% in 2023. But despite a slower-than-anticipated rollout, nearly half of manufacturers are already reporting cost benefits from their AI initiatives.

The study gathered input from over 2,500 leaders involved in AI technology decision-making worldwide. The report explores manufacturers’ investments in generative AI and their progress in implementing GenAI projects.

In 2023, more than 40% of manufacturing leaders had a positive view of AI, with 93% planning to increase investments. In 2024, only 58% plan to increase their spending. 30% worry that they’re falling behind their competition, with only one in five successfully deployed initiatives. Despite slow deployment, manufacturers reported above-average cost benefits (48%).

According to Lucidworks, concerns around security, response accuracy, and costs have forced most businesses to slow down their planned initiatives and be more strategic about the balance between cost and benefit. Security worries have tripled, accuracy concerns have grown fivefold, and transparency issues have quadrupled since 2023. Manufacturers have some of the most concerns around response accuracy (44%) and some of the least concerns around job displacement (3%) compared to other industries.

The 2024 Generative AI Global Benchmark Study also includes the following findings:

• Investment Slowdown: Global AI spending plans are down sharply, with only 63% planning increases (vs 93% last year).
  USA-based organizations remain above average with 69% planning to increase AI spend.
• Slow Progress: Delayed deployment and low success rates are commonplace with only 25% of planned projects fully implemented.
  This lag is stalling anticipated ROI, with 42% of companies yet to see significant benefits from generative AI initiatives.
• Spending Flattens: Across all organizations, 36% of leaders plan to keep spending flat, compared to only 6% in last year’s survey.
• China’s Sharp Decline: Only 49% of Chinese leaders plan to increase AI spending in 2024, a massive drop from 100% in 2023.
• Commercial LLMs Dominate: Nearly eight in 10 companies use commercial LLMs and 21% have opted for open source only.
• Competitive Concerns: A third of business leaders feel like they’re falling behind competitors despite almost everyone struggling to implement this new technology.

“While many manufacturers see the potential benefits of generative AI, challenges such as response accuracy and cost are causing them to take a more cautious approach. This is reflected in spending plans, with significantly fewer planning to increase AI investments compared to last year,” said Mike Sinoway, CEO, Lucidworks. “However, above-average reported cost benefits in 2024 could make them more bullish in the coming year. B2B companies and manufacturers have much to gain if they can balance cost and risk to improve efficiency, enhance the buyer experience, and reduce operational costs using generative AI.”

The complete report and the accompanying manufacturing-focused findings can be found on Lucidworks website.