Walmart is using AI to negotiate prices with suppliers, report says — and the suppliers are loving it

• Walmart is using technology from Pactum AI to negotiate with suppliers, per a Bloomberg report.
• The retailer tells the AI chatbot its budget, and the chatbot communicates with a human vendor.

If you're a Walmart supplier, you may not be hammering out deals with a human employee of the retail giant.

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

Per 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 vendors to finish deals.

And a majority of suppliers – three out of four – actually like dealing with the robot more than a Walmart negotiator, the retailer told Bloomberg. Walmart was Pactum's first customer, the news outlet reported.

"Some really like it and are like, 'This is the best way to do it,'" Darren Carithers, Walmart's senior vice president for international operations, told Bloomberg. "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."

Pactum AI's chatbot is able to negotiate about discounts, payment terms, and prices for individual products, as well as compare current vendor deal offers to historical ones and what other companies are paying. Walmart told Bloomberg that the artificial intelligence has helped the company close deals in days instead of weeks or months when only humans were involved.

Walmart's shopping app also uses AI technology

This is not the first time Walmart has embraced artificial intelligence. The company rolled out a new text-to-shop tool in December 2022 that allows customers to communicate with a robot and to text the retailer the names of products they want to purchase. And more than 50 million customers are using a chatbot that provides information to shoppers online and through the app, Walmart CEO and President Doug McMillon wrote in an annual letter to shareholders this month.

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

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

"Putting Walmart information into these tools risks exposure of the company's information, may breach confidentiality, and may significantly impact our rights in any code, product, information, or content," per the memo. "Every associate is responsible for the appropriate use and protection of Walmart data."

Have any thoughts on Walmart's usage of AI? Contact reporter Ben Tobin over email at btobin@insider.com.