Tesco signs AI deal with start-up to boost operations

Tesco has signed a three-year deal with French tech start-up Mistral AI, as part of a broader strategy to bolster the use of artificial intelligence in the retailer’s operations.

The partnership is designed to give Tesco full access to the AI company’s commercial models, including any future developments, as well as its AI engineers.

The agreement includes a commitment for the two companies to work together through a new joint “AI lab” where Mistral AI and Tesco’s technology teams will co-create new generative AI solutions for different parts of the Tesco business.

Tesco’s approach to AI is focused on improving the experience for its customers, staff and suppliers, while also enhancing its wider operations.

The agreement will cover a range of areas, including content development and document drafting; speeding up data analysis to provide richer insights for staff; and developing new ways for them to easily access information which they can use to help customers.

Tesco data, analytics and AI director Ruben Lara Hernandez said: “Innovation has always been part of Tesco’s DNA, and this agreement builds on our extensive track record in developing new technology and AI solutions, in ways that ultimately benefit our customers, colleagues and suppliers.”

Tesco has doubled the size of its technology team over the past five years in recognition of the huge potential for new technology to improve the overall experience for customers.

The retailer is already using AI, developed both in-house and with partners, across its operations. For example, AI allows Tesco to find the most efficient routing for online orders to create more delivery slots for customers, helps with complex demand forecasting to ensure product availability, and is allowing the retailer to engage with customers in an increasingly personalised way through Tesco Clubcard.

Mistral AI is claimed to be the only frontier AI company in Europe that is building large language models, and Tesco is the first major UK retailer to strike a partnership with the leading European AI player, as part of its wider AI and technology strategy.

The start-up has developed rapidly since its launch in April 2023 and has customers including HSBC, multinational insurer AXA and carmaker Stellantis.

Tesco signs AI deal with start-up to boost operations

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