Walmart is using AI to negotiate prices with suppliers, the report says, and suppliers love it

Blue Walmart store front

Walmart uses AI to negotiate deals with equipment suppliers.ap

  • Walmart is using Pactum AI technology to negotiate with suppliers, according to a report from Bloomberg.

  • The retailer tells the AI ​​chatbot its budget, and the chatbot talks to a human vendor.

  • The Bentonville, Arkansas-based retail giant has been embracing AI a lot recently.

If you’re a supplier to Walmart, you might not make deals with a human employee of the retail giant.

Walmart is using a chatbot to conduct negotiations with equipment suppliers, according to a recent report from Bloomberg. The chatbot, which is similar to the popular and rapidly growing ChatGPT, was developed by Pactum AI, an AI technology company based in Mountain View, California.

According to Bloomberg, here’s how it works: The Bentonville, Arkansas-based retailer tells the software its budget and priorities. Then, the chatbot will negotiate with human sellers to close deals.

And most of the suppliers, three out of four, enjoy dealing with the robot more than a Walmart negotiator, the retailer told Bloomberg. Walmart was Pactum’s first customer, the news reported.

“Some really like it and they’re like, ‘This is the best way to do it,'” Darren Carithers, senior vice president of international operations at Walmart, told Bloomberg. “But I would relate it to people who use self-checkout in stores. Some customers love it, but guess what: some customers want to go to a manned checkout and see a person.”

The Pactum AI chatbot is able to negotiate discounts, payment terms and prices for individual products, as well as compare current offers from suppliers with historical ones and what other companies are paying. Walmart told Bloomberg that AI helped the company close deals in days rather than weeks or months where only humans were involved.

Walmart’s shopping app also uses AI technology

This isn’t the first time Walmart has adopted AI. The company launched a new text-to-shop tool in December 2022 that allows customers to communicate with a robot and text the retailer with the names of the products they want to buy. And more than 50 million customers use a chatbot that delivers information to shoppers online and through the app, Walmart CEO and chairman Doug McMillon wrote in an annual letter to shareholders this month.

But the retailer has still shown some concerns about the AI ​​chatbot technology.

Walmart Global Tech, the retailer’s software engineering and technology arm, sent out an internal memo in February telling all employees not to share confidential information about Walmart with ChatGPT.

“Entering Walmart information into these tools risks exposing company information, may violate confidentiality, and may significantly impact our rights in any code, product, information or content,” the memo reads. “Each contributor is responsible for the proper use and protection of Walmart data.”

Do you have any thoughts on Walmart’s use of AI? Contact reporter Ben Tobin by email at [email protected].

Read the original article on Business Insider

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