Greetings!
Walmart’s announcement this week that it would become the first major retailer to start selling products through ChatGPT’s Instant Checkout shows that big retailers are being forced to take new forms of artificial intelligence–related online shopping seriously. It’s not shocking that Walmart, as a megaretailer that wants to sell more stuff online, would partner with OpenAI. Letting people buy stuff from Walmart within ChatGPT may mean fewer of them visit the company’s website or app, which could be a problem, but it’s not like it was a dominant online shopping destination in the first place.
Now the big question is: Will Amazon follow Walmart’s lead? The answer is not obvious (and Amazon isn’t saying). Unlike Walmart, Amazon is the dominant e-commerce site, so doing anything to encourage shoppers to go elsewhere could be counterproductive. Moreover, working with ChatGPT or another chatbot would be an admission that its own AI features aren’t cutting it. (When was the last time you used Amazon’s e-commerce chatbot, Rufus?) Plus, having more shoppers search outside Amazon’s site would likely undercut its gargantuan advertising business, which is largely made up of merchants and brands paying to boost their products in search results on its website.
On the other hand, if you believe a big chunk of online shopping in the future will take place through chatbots, refusing to work with OpenAI in 2025 could be akin to refusing to let Google index your website in 2000. What’s more, if Amazon were to do a big e-commerce deal with OpenAI, it could pave the way for OpenAI to someday become a large Amazon Web Services customer, just as OpenAI has signed up to use Oracle and even Google Cloud. AWS and OpenAI took a tiny step in that direction in August, when AWS finally started offering OpenAI models to customers—more than two and a half yearsafter ChatGPT became a household name.
Amazon has successfully navigated a similar “frenemy” relationship with TikTok—a large AWS customer but also an increasingly significant competitor in e-commerce. Though Amazon competes with TikTok in online shopping, it decided to start placing shoppable ads on TikTok. That followed an internal debate about whether doing so could hurt Amazon by further boosting TikTok’s appeal as a shopping destination, as we reported last year.
If Amazon was purely a retail company, then CEO Andy Jassy’s calculus of whether to work with ChatGPT’s Instant Checkout might be simpler. But he’s leading a huge conglomerate where what’s good for one business can hurt others. That makes it tough to handicap his final choice.
Fat Fingers
Everything in crypto is wilder than in traditional finance, and that includes fat-finger mistakes. Paxos, which issues stablecoins on behalf of PayPal, today mistakenly created $300 trillion worth of PayPal stablecoins. The transaction—visible on the Ethereum blockchain—bewildered crypto fans for a little while.
Within half an hour, Paxos reversed the transaction by destroying the $300 trillion stablecoins. It later said in a tweet that it was an “internal technical error” and there had been no security breach. The amount surpassed Citigroup’s fat-finger mistake last year, when it mistakenly credited a client with $81 trillion before reversing the transaction several hours later. Regulators were swiftly notified. In another case in 2022, a Citi fat-finger trading error briefly shocked the European stock markets.
In Paxos’ case, the immediate impact seems to be negligible. Still, Aave, a popular crypto-lending platform, temporarily froze further deposits of the PayPal stablecoin, PYUSD. The New York State Department of Financial Services, which regulates Paxos, told The Information: “The department is aware of the incident and is in contact with Paxos and PayPal.”—Yueqi Yang
In Other News
• A group of investors including BlackRock and Abu Dhabi’s MGX acquired Aligned Data Centers in a roughly $40 billion deal, the latest big investment in companies building data centers for the tech giants.
• The U.S government conditionally approved a bank charter application for Erebor Bank, a cryptocurrency-focused bank co-founded earlier this year by Anduril co-founder Palmer Luckey and Palantir co-founder Joe Lonsdale.
• Amazon is preparing to lay off as much as 15% of its human resources staff, Fortune reported, along with making cuts to other parts of its consumer division.
•The EU is discussing new rules that would force Chinese companies to transfer their technologies to European companies or form joint ventures with European partners when operating in the region, Bloomberg and other news outlets reported.
• Meta Platforms and semiconductor company Arm on Wednesday announced a partnership in which Meta will use Arm’s data center platforms to power the ranking and recommendation systems for its social media apps, according to a blog post.
Today in The Information’s TITV
Check out today’s episode of TITV in which we talk with health tech columnist Christina Farr about what physicians actually think of AI’s impact on medicine.
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