Manufacturers around the world are entering an exciting new phase in 2026. After years of testing and experimenting with artificial intelligence (AI), companies are now moving forward with real, practical uses of this technology. A major survey from January 2026 shows that manufacturers are no longer just playing around with AI—they are putting it to work every single day to improve how they make products and run their businesses.

The survey included responses from 520 leaders at mid-sized and large manufacturing companies across North America, Europe, and Asia. The results paint a clear picture: almost every manufacturer is using AI in some way. In fact, 94% of manufacturers reported using some form of AI technology. This is a remarkable shift from just a few years ago when AI was something most companies were still thinking about.

So what kinds of AI are manufacturers actually using? The answer is practical and powerful. Predictive AI is leading the way, with usage jumping up 12 percentage points to 48%. Predictive AI looks at information from the past to guess what might happen in the future. For example, it can predict which machines might break down, so workers can fix them before they actually fail. This saves companies lots of money and keeps production running smoothly.

The second most popular use is supply chain planning, where AI helps companies figure out the best way to get materials and products where they need to go. Interest in this type of AI jumped up 19 percentage points to 35%. The third popular use is process optimization, where AI makes work faster and better by finding smarter ways to do things. This jumped up 11 percentage points to 36%. All three of these uses focus on making the actual factory work better—not on experiments or fancy features that don't really help the business.

One reason manufacturers are focused on practical AI uses is that they face real pressures right now. Companies expect tough economic times ahead. Around 31% of manufacturers predict that demand for their products will go down this year. Additionally, 39% expect higher costs for raw materials because of trade problems and tariffs. With these challenges, manufacturers can't waste time on AI experiments—they need AI that helps them right now.

But moving to practical AI isn't easy. Manufacturers are running into big problems. The biggest problem is finding workers with the right skills. Around 33% of manufacturers say the lack of talented people is their biggest challenge, and this number went up from 25% the year before. These companies need people who understand both manufacturing and AI, and those people are hard to find. Companies also struggle with getting different departments to cooperate and convince workers to embrace new technology instead of resisting it.

While these software systems are being rolled out in factories, manufacturers around the world are also building new AI technology. In Asia, Taiwan's chip company TSMC announced it will make super-advanced 3-nanometer semiconductors in Japan. These tiny, powerful chips are perfect for AI technology, and they show how AI is spreading into different parts of manufacturing. The decision to make these advanced chips in Japan demonstrates how important AI has become to global manufacturing.

At the same time, autonomous AI agents—computer programs that can make their own decisions and work without a human telling them what to do every second—are already helping with deliveries. A company called Zipline has completed 4 million autonomous drone deliveries for things like medical supplies. In cities, delivery robots are rolling down streets making package deliveries all by themselves. These AI agents show what the future of manufacturing and logistics might look like—machines that can think and act on their own.

Manufacturers are planning to invest more money in these new technologies, but they're being careful about spending. 61% of manufacturers plan to increase spending on software in the next year. However, most expect only modest budget increases. Companies are focused on spending money where it matters most: 40% of manufacturers list operational and production performance as their top IT priority.

The bigger picture is that 2026 marks a turning point for manufacturing. AI is no longer something new or scary. It's becoming part of normal factory work. Manufacturers who figure out how to use AI well—and who can find the talent to make it work—will gain an advantage over their competitors. Those who don't adapt will fall behind. The challenge now isn't whether to use AI. The challenge is using it smartly, getting your team on board, and finding the right people to make it all work.