AI’s Role in Identifying Cyber Threats in the Supply Chain

Artificial intelligence is widely recognized today as a crucial tool for maintaining manufacturing efficiency and profitability. With 93% of manufacturing companies believing that AI will be “a pivotal technology” to drive growth and innovation, it’s no surprise that its projected annual growth in manufacturing is over 40% — expected to surpass $2 billion in 2025.

Most of the current use of AI in manufacturing is in smart production, enabling factory automation, order management, and automated scheduling. But that’s just the beginning: AI’s value for manufacturing is rapidly expanding beyond production optimization –—to security. 

Physical Security Threats

Amid escalating trade wars and tumultuous geopolitical conflicts around the world, supply chains have become vulnerable targets for malicious actors. This increasing volatility is reflected in the Geopolitical Risk with Trade (GPRT) index, which surged by a frightening 30% between 2020 and 2024 compared with the two decades prior. Among the most pressing threats are physical security and product integrity. Ninety-one percent of IT and security decision-makers believe that nation-state actors are likely to launch a new era of cyberattacks by embedding malware or malicious components into hardware and firmware that will make their way into electronics such as computers and electric vehicles. An additional 63% anticipate that the next major nation-state attack will involve malware introduced through hardware supply chains. The ramifications of such an attack would extend well beyond operational disruptions, potentially compromising consumer safety and even national security.

A staggering number of U.S. businesses have already been impacted by nation-state threat actors’ use of malicious hardware, while tech giants such as Apple and Amazon.com have had their supply chains compromised by tiny microchips. And those are just the instances we’re aware of —the true number is likely to be much higher.

This risk is exacerbated by the overwhelming lack of thorough electronic component traceability — the process of identifying country of origin, date and lot code,