Arizona Tribune - InstaLILY Research Finds One in Six Leaders Across the Supply Chain Faced an AI Incident Involving Supplier or Customer Data

NEW YORK CITY, NY / ACCESS Newswire / November 4, 2026 / One in six supply chain, logistics, distribution, and wholesale leaders say their company had an incident in the past year in which supplier or customer data was exposed, shared, or accessed incorrectly through an AI tool, according to a new InstaLILY survey of 250 managers and executives. The findings come as AI reaches deeper into commercially sensitive records. Seventy-eight percent say their AI tools can access customer pricing and margins, and 67% say the same for supplier pricing and rebate data.

Distributors, wholesalers, and logistics providers routinely work with confidential information from both sides of a transaction. If AI puts one customer's contract price on another customer's quote, surfaces a supplier's bid to a competitor, or shows a shipper the carrier rate behind a broker's margin, the damage reaches every party involved. The business choosing an AI tool is also making a decision about information entrusted to it by others. That exposure is at the center of InstaLILY's report, Shared Risk: Why Supply Chain's Most Sensitive Data Needs AI Built for the Industry.

Trading Partners Are Bringing Data Protection Into Purchasing Decisions

Questions from suppliers and customers are already influencing technology choices. Sixty-three percent of respondents say their employer has been asked how supplier or customer information is protected, and nearly a third of all respondents (30%) say such an inquiry affected a vendor, software, or AI decision. Respondents most often expect their own company to bear the most responsibility for an exposure (51%), compared with 23% who point to the software or AI vendor.

"Speed means very little if a faster answer costs you a relationship that took years to build," said Adam Isenberg, Head of Distribution at InstaLILY. "AI working in distribution should know that one customer's contract price never belongs on another customer's quote. Buyers should make vendors prove that before they sign."

Confidence Is High, and Incidents Are Already Showing Up

Sixty-three percent of respondents report at least some overlap between supplier and customer data across company platforms, including AI tools, and 87% are very or somewhat confident their AI keeps that data appropriately separated. Still, incidents were reported in every segment surveyed. That gives businesses good reason to test how AI handles confidential information throughout a task, from the records it retrieves to the response it delivers.

Industry-Built AI Must Respect the Relationships Behind the Data

The most common barrier to keeping supplier and customer data separate is that AI tools were not built with that requirement in mind (22%), ahead of cost (21%) and lack of technical expertise (20%). Ninety percent say their employers would be more likely to choose AI built for distribution and supply chain operations over a general-purpose tool if it offered better control over supplier and customer data, and 92% call data separation a high or moderate priority for the next 12 months.

The report recommends testing those controls in everyday tasks, such as preparing a quote without revealing confidential supplier terms, and establishing when human approval is required. InstaLILY's Lily^™ builds agents that operate within existing business systems, with access permissions and audit records supporting oversight.

Download the full report here and learn more at instalily.ai.

ABOUT THE SURVEY:

InstaLILY surveyed 250 professionals at manager level and above in supply chain, logistics, distribution, and wholesale whose companies use AI tools, including AI features built into existing software, in daily operations. The survey was launched on Oct. 9, 2026. Results reflect respondents' reported knowledge and experiences.

ABOUT INSTALILY:

InstaLILY^™ builds AI agents that learn how a business produces its results and do the work of sales, operations, service, and AI oversight inside the systems that distributors, manufacturers, logistics providers, healthcare providers, and field service companies already run. Founded by Amit Shah and Sumantro Das, InstaLILY has raised nearly $100 million from Energize Capital, Insight Partners, and Home Depot Ventures. Headquartered in New York, with offices in San Francisco, London, and Toronto. Learn more at www.instalily.ai.

MEDIA CONTACT: Nina Pfister, MAG PR at E: [email protected]

SOURCE: InstaLILY

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