Target Reassessing AI Strategy, Commits $2bn to Stores and Technology
TGT•Target is reevaluating its AI strategy as usage-based pricing from Anthropic and OpenAI complicates cost planning and spurs high-level tech architecture discussions. Under CEO Michael Fiddelke, the retailer plans $2bn in store openings, refurbishments and AI projects after lifting its 2026 net sales growth forecast to around 4%.
1. Strategic Reassessment of AI Strategy
Target is shifting from using AI to running on AI but is facing increased complexity as providers adopt usage-based pricing models from companies like Anthropic and OpenAI, prompting executive-level reviews of technology architecture and strategy across its global forums.
2. Significant Investment Plans
The company will direct an additional $2bn this year toward new store openings, refurbishment of existing sites and AI initiatives, reflecting its commitment to integrating advanced technology throughout its operations.
3. Enhanced India Analytics Centre
Target’s Bengaluru global capability centre, which supports merchandising, digital, stores and supply chain functions with around 5,600 employees, will receive significant investments to strengthen analytics capabilities and ensure teams have access to appropriate AI tools.
4. Leadership and Financial Outlook
Under CEO Michael Fiddelke, Target raised its full-year net sales growth outlook to approximately 4% after a 6.7% first-quarter sales increase, while also appointing Jeff England as executive vice president and chief global supply chain and logistics officer effective May 31.
