Walmart (WMT +0.64%) is the world's biggest retailer, and maintaining that position means keeping up with modern technology.
After neglecting e-commerce earlier, the company has spent the last decade building a network of grocery pickup stations to fulfill online orders, and it's created a robust marketplace. Those moves have paid off as Walmart has soared in recent years, outperforming rivals like Amazon, Costco, and Target over the last three years.
Now, Walmart is making a big move in artificial intelligence, teaming up with OpenAI.
Image source: Walmart.
What Walmart is doing with OpenAI
Following in the footsteps of e-commerce companies like Etsy and Shopify, Walmart will also start using ChatGPT's "Instant Checkout" feature.
With instant checkout on ChatGPT, shoppers can search for a product using the AI chatbot and buy it from Walmart through the chat interface. Let's say you ask ChatGPT for the best gas grill under $500. Once it gives you its recommendation, it will give you the option to buy it from Walmart, assuming Walmart sells it.
CEO Doug McMillon touted the new partnership, saying, "For many years now, e-commerce shopping experiences have consisted of a search bar and a long list of item responses. That is about to change. There is a native AI experience that is multimedia, personalized and contextual."
In addition to instant checkout, Walmart is also using ChatGPT internally with its employees, training them for OpenAI certifications.
NASDAQ: WMT
Key Data Points
An advantage over Amazon
The instant checkout partnership also gives Walmart an edge over Amazon, which is a partner of Anthropic, a competing AI start-up into which it has invested $8 billion, giving it an estimated 15% to 19% ownership of Anthropic.
Anthropic could eventually introduce a similar feature for its AI chatbot Claude, but Claude's user base is much smaller than ChatGPT's, and its focus tends to be different, as it's known for being able to handle larger documents and provide in-depth analysis.
It's unclear how significant the partnership will be for Walmart, but the stock jumped on the news, gaining 5% on Oct. 14 when it was announced.
McMillon is correct that it's past time for the online shopping experience, and searching easily through ChatGPT could be transformative. Keep an eye on how Instant Checkout performs, as it could move the needle even for a company the size of Walmart.
