How AI Is Reshaping Supplier Negotiations

AI affects every aspect of the supply chain and is now moving into supplier negotiations, according to a recent article in the Harvard Business Review.

Authors Elena Revilla is a professor and head of the Operations and Business Analytics Department at IE Business School in Madrid, and Maria Jesus Saenz is the director of the Digital Supply Chain Transformation Lab at the MIT Center for Transportation and Logistics.

The following is an excerpt on AI capabilities in this area. 

Companies aren’t jumping overnight from manual processes to having an AI system close deals on their behalf. Instead, they’re progressing step by step, moving from AI-assisted to semi-autonomous to fully autonomous negotiations.

Fully Autonomous Stage

These systems handle negotiations end to end—within guardrails. They use real-time inventory, supplier history, and market data to close dozens of deals at once. One example is Walmart’s use of AI to negotiate replenishment terms with suppliers for frequently purchased, low-margin items without human approval. Another is Advanced Micro Devices’ use of Luminance’s Automark-up, an AI-powered tool that can markup legal contracts like non-disclosure agreements autonomously.

Establish clear accountability frameworks.

If an AI tool makes a mistake—like incorrectly assessing a supplier—the company, not the software, is responsible. These errors can lead to serious legal or financial consequences. Therefore, companies should establish clear accountability guidelines with defined procedures for review, redress, and oversight. Companies should establish safeguards such as the obligations of parties to disclose the use of AI, how it operates, how the parties’ data will be used, and how privacy will be protected. This is especially important in B2B contexts, where regulatory requirements may be less defined.

Rethinking the Negotiation Profession

Some worry that automation could hurt career development in areas such as procurement—particularly for junior talent. But we believe such fears are overblown. Reviewing dozens of repetitive contracts doesn’t necessarily make someone a better negotiator. Instead, automating those tasks frees up people to spend more time on more strategic, high-stakes negotiations, where human judgment remains essential. The shift to AI will not only drive efficiency, it will also free up talent for more strategic, higher-value tasks.