US retailer Target is deepening its AI adoption even as shifting pricing models from AI providers are forcing a strategic reassessment, according to the company’s India president.
Speaking at a Reuters summit in Bengaluru, Karnataka, Andrea Zimmerman said the retailer is moving from “using AI to running on AI,” but that usage-based pricing now being adopted by companies such as Anthropic and OpenAI is complicating planning
Zimmerman was quoted as saying: “It is forcing us to re-evaluate our strategy.” She noted that pricing conversations are now taking place “at the highest level in both our architecture forums, as well as in our senior leadership forums within technology”. The company is also committing “significant investments” to ensure its teams have access to appropriate tools. Separately, Target is seeking to strengthen its analytics capabilities in India.
The retailer’s Bengaluru global capability centre, which spans merchandising, digital, stores and supply chain functions, employs around 5,600 people. Under chief executive Michael Fiddelke, the company intends to direct an additional $2bn this year towards new stores, refurbishments and AI projects. The news follows a stronger-than-expected trading update earlier this month, in which Target lifted its full-year net sales growth outlook after reporting a 6.7% year-on-year rise in first-quarter net sales to $25.44bn.