TL;DR:
- Walmart uses AI to negotiate with suppliers for better prices.
- The AI technology used is a chatbot developed by Pactum Inc.
- Suppliers prefer negotiating with AI instead of a human.
- Walmart has reached deals with 68% of suppliers using AI and saved an average of 3% on contracts.
- AI increases productivity in the workforce by 14%, with the least skilled workers completing tasks 35% faster.
- OpenAI is not releasing ChatGPT-5 in the near future.
Main AI News:
Walmart, one of the world’s largest retailers, has been using AI to negotiate with suppliers for the best prices on its necessities, and the suppliers seem to be enjoying the experience.
According to a recent report from Bloomberg, Walmart has been utilizing a chatbot developed by California-based Pactum Inc., a company specializing in autonomous negotiation software. The retailer inputs the products it needs and its budget into the Pactum AI, which then communicates with human sellers to secure the best deal for Walmart.
“Some [vendors] really like it and are like, ‘This is the best way to do it,‘” said Walmart Senior VP for International Operations, Darren Carithers. “But I would relate that to people using self-checkout in stores. Some customers love it, but guess what: Some customers want to go to a manned checkout and see a person.”
According to Bloomberg, three out of four suppliers have told Walmart that they prefer to negotiate with an AI rather than a human, and the retailer has reached deals with 68% of its suppliers using the Pactum AI since the program’s launch in 2021. The use of AI has resulted in an average savings of 3% on contracts negotiated through the software, which can add up to substantial savings for a company with a billion-dollar turnover.
The AI revolution raises questions about how AI will intersect with the economy and workforce. New research from Stanford University and the Massachusetts Institute of Technology has found that 14% of employees who use AI in their workflow have seen an increase in productivity, with the least experienced and least skilled workers completing tasks 35% faster. However, OpenAI CEO Sam Altman recently announced that the company is not releasing ChatGPT-5 anytime soon.
Conlcusion:
The use of AI in the retail industry is proving to be a valuable tool in negotiating with suppliers and securing better prices. The willingness of suppliers to negotiate with AI technology instead of humans highlights the increasing trust in the capabilities of artificial intelligence. The results of Walmart’s use of the Pactum AI, with an average savings of 3% on contracts, demonstrate the potential for significant cost savings for retailers.
Additionally, the findings of increased productivity in the workforce further solidify the potential for AI to positively impact the market. As AI technology continues to advance, it is likely that we will see more widespread adoption in the retail industry and beyond.
