At night, a group of technicians from a power company unexpectedly visits the home of Charles Graiman. Their arrival raises suspicions since they were not scheduled to come until the following morning. Unfortunately, the situation escalates when the technicians threaten Graiman's daughter. This shocking encounter leads to Graiman suffering a fatal heart attack. As they search the house for hard drives related to a defense initiative called Prometheus, they come across a parked Ford Mustang Shelby GT500KR in the garage, which they attempt unsuccessfully to impede from escaping.
Meanwhile, we meet Mike Traceur, a 25-year-old ex-Army Ranger, as he is roused from sleep by his friend Dylan Fass, who informs him that “Mike’s investors” are after him to collect a considerable gambling debt of $90,000. In an attempt to flee, Traceur's Shelby Cobra breaks down, and the creditors threaten Fass's life if the debt isn't settled promptly.
After an early morning surf, FBI special agent Carrie Rivai receives alarming news: her longtime friend Graiman has passed away. Leaving behind her date from the previous night, she hurries to investigate the troubling situation.
On the academic front, Sarah Graiman, a 24-year-old Ph.D. candidate at Stanford University, delivers a lecture on nanotechnology. Following the class, she receives a warning from KITT, the advanced AI vehicle, about potential abduction threats. Despite the warning, she is captured by her pursuers but is quickly rescued by KITT. Together, Sarah and KITT track down Mike, her childhood friend, with whom she has lost contact since he left home at 18 years old. They discover Mike deep in poker at the Montecito Casino, desperately working to settle his debts. Although initially reluctant, Mike agrees to help Sarah when she offers to clear his debts.
As they begin to unravel the mystery behind Graiman's death, Rivai arrives at his home and is prompted by the local corrupt sheriff to identify the body. To her surprise, she discovers that the body is not Graiman's; the real Graiman has managed to escape through the woods, leaving a body double in his stead. He later seeks refuge at Mike's mother's house, Jennifer, and together, they head to a nearby motel.
The men pursuing Graiman are mercenaries working for a security contractor named Black River, who are after the Prometheus project—a system that oversees the entire U.S. defense network. The critical information to access this system is encrypted and exists on the hard drives in the hands of the mercenaries. Only Graiman and Sarah possess the encryption keys, with KITT also housing necessary data and access capabilities.
Graiman contacts Sarah, urging her to meet him at the motel and to reach out to Rivai for assistance. However, Rivai unknowingly makes a critical mistake by placing her phone on speaker mode, allowing the sheriff to overhear their conversation and compromising their safety.
As KITT, Sarah, and Mike arrive at the motel, they uncover that the mercenaries have not tracked down Graiman yet, as he cleverly checked into multiple rooms. Utilizing KITT’s infrared sensors, Mike locates Graiman and his mother and executes a daring rescue. They learn from Graiman that Mike's father was Michael Knight, the original driver of the first KITT, which explains why Mike had distanced himself from his family.
With this new information at hand, they race to KITT, only to find one of the mercenaries attempting to breach its system. In a bid to protect KITT, Graiman orders it to shut down temporarily while suggesting that Mike take manual control. The situation becomes dire when the mercenaries discover their location, and chaos ensues, culminating in Jennifer being tragically killed. Graiman is captured, leaving Mike and Rivai in a precarious position while Sarah and KITT are watched over.
Faced with overwhelming odds, Mike and Rivai manage to overpower their captors just as their lives hang by a thread. They decide to pursue Graiman, which leads to a series of intense events where KITT's diminished self-repair capabilities are put to the test, revealing vulnerabilities. After exchanging gunfire with the mercenaries, Mike swiftly reactivates KITT, enabling him to deploy his armor just in time. The ensuing chaos results in a collision between KITT and the mercenaries' vehicle, leading to significant damage on the mercenaries' end while Graiman escapes without serious injury.
Following the devastating news of Jennifer's funeral, Graiman discusses his plans to re-establish the Foundation for Law and Government (FLAG), extending an invitation to Mike to take the wheel of KITT. However, Mike declines, citing fundamental philosophical differences with Graiman. At the funeral, Mike's father Michael Knight offers him sage advice, reiterating the idea that one individual can truly make a difference—a belief he once held dearly. The two share a heartfelt moment before parting ways, with Michael indicating a hope for a future meeting.
In the final scenes, Mike is seen behind the wheel of KITT in an enclosed area while Rivai, Graiman, Sarah, and Fass bid him farewell and brief him on his upcoming mission. Sarah shares a tender kiss with Mike as a door opens revealing a moving roadway, leading Mike and KITT to exit in reverse from the cargo hatch of a C-130 Hercules cargo plane, poised for their next adventure. As they take off, Mike confidently pushes KITT into manual mode, embracing his destiny with the iconic vehicle, ready for whatever challenges lie ahead.
