The big story of the week - and it isn’t from diginomica unfortunately...
Loathe though I am to direct you away from diginomica, but the big tech story of the week came from The New Yorker and Ronan Farrow’s excoriating profile of OpenAI CEO Sam Altman. I’ve always been rather uneasy about Altman, fearing that his acceptance of the responsibilities of the position he finds himself in doesn’t always appear to me to be reflected in some of his statements and actions.
Take, for example, that notorious session at Dreamforce where he tried, totally straight-faced, to convince the audience and Salesforce CEO Marc Benioff that hallucinations were all part and parcel of the benefits of generative AI! This coming only hours after Benioff had fired up the Dreamforce faithful about what he preferred to call AI’s “lies”. I thought at the time, the first time I’d seen Altman up close, that I had a bad feeling about what was to come.
But Farrow, the Pulitzer Prize-winning journalist behind the Harvey Weinstein sexual abuse exposé that sparked the MeToo movement, has done what must be the definitive (to date) piece on Altman, OpenAI and the prevailing culture and attitudes of both man and company - and it isn’t flattering, to say the least, with former associates of Altman ready to brand him a sociopath and a pathological liar, a man operating within a “reality-distortion field”.
The article, entitled 'Sam Altman May Control Our Future—Can He Be Trusted?', is apparently based on interviews with more than 100 people over the course of 18 months, as well as access to hundreds of previously unpublished internal documents.
I won’t go into any more details - I don’t want to deprive you of the enjoyment of reading Farrow’s excellent work for yourselves - but suffice to say it’s the kind of investigative journalism that I’d love to be able to boast I’d written myself.
I’m not the only fan, finding myself in the rather unfortunate company of Altman’s nemesis Elon Musk, who was quick to share the link to the text on social media, asking ‘innocently’ if this is a man who can be trusted with a super-powerful AI at his command? (That’s Altman by the way, for avoidance of doubt...)
My take - What are you still doing here? Go and read it!
Getting down with da kidz
An interesting update from Ulta Beauty’s CEO Kecia Steelman this week, boasting about the firm’s launching on TikTok Shop last month. Steelman explained:
Newness and brand building [are] really important to us, really important to this entire category. So [we are] really doubling down on that, and then leveraging our investments around personalization. Our digital acceleration and personalization in communicating one-to-one with that rich 46.7 million loyalty member base that we have today is really important.
Hence TikTok shop:
To me, this is about as much of being front and center and top of mind from a guest acquisition perspective. You want to be where the consumer is shopping and where they're engaging with the brands. And I think the timing is perfect for us as the first specialty beauty retailer to join TikTok Shop.
I'm very excited by what we're already seeing. The way that I'm looking at this business as a whole is that it's not just about guest acquisition. It's about creating that excitement of buying in real time and having that energy and that excitement of what's happening in the moment. You think about the old QVC, HSN, where you'd watch TV and you'd buy immediately. It's that instant gratification that you can see brought to life in that experience.
Steelman added that Ulta will be one of the first retailers able to have cross-branded bundles to sell:
That's how the beauty consumer is shopping today, so that is really, really exciting to me. What we've heard early on, we like what we're seeing with the algorithms, first and foremost. And secondly, the creators are coming out, thousands and thousands of creators have been reaching out to us because they want to come and represent Ulta Beauty.
The more you can get your brand out there in the conversation, that's a huge win for us at Ulta Beauty. And the second is that more and more brands, traditional brands even, are coming to us saying that they want to participate now in TikTok shop because we're not coming at it from a discounting perspective, we're coming at it from a unique bundling perspective. So while it's still early innings on this, we're excited by what we see. We just think it's another tool that we can add to our ecosystem that will continue to differentiate us from others that are out there.
Away from social media, there is, of course, an AI play in the wings as well:
In regards to re-aligning our growth for the future, it's around AI. How are we going to continue to leverage AI? We’ve seen some great successes in our guest services platforms and how we can really improve our efficiencies there. But also in supply chain, there's been some great wins. Agentic AI, we're very excited about what agentic could really do to enhance our business.
My take - One to keep an eye on.
He said what?
In a world of changing commerce where we talk about agentic commerce and things like that, the thing that is probably most under-appreciated is the complexity of end-to-end retail. And so being really good retailers matters no matter what the channel is that someone is going to be buying something from one of our stores or e-commerce sites.
John Rainey, Walmart CFO
Like a bag of cats
The World Trade Organization (WTO) is a worthy body whose 166 member states dutifully mouth platitudes about global co-operation before retreating back to their own countries and proceeding to fight like a bag of cats with their ‘partners’.
So no surprise then that the 14th WTO Ministerial Conference (MC14) in Yaoundé came and went without agreement on an extension of the moratorium on customs duties on electronic transmissions, one of the critical foundational planks of a putative global digital economy where everyone plays on a level playing field.
The trigger for the lack of agreement on this occasion was a dispute involving the US and Brazil over how long to extend the 28-year-old agreement E-Commerce Moratorium that prevents tariffs being imposed on electronic transmissions, such as streaming and digital services. The US wants the moratorium to be permanent, ut the likes of India aren’t so keen, fearing loss of digital tax revenues. But it was Brazil that killed any compromise this time around, seemingly in protest at an unrelated debate with the US about agricultural policy. So everyone went home and is free to impose any tariffs on digital services that they choose/think they can get away with.
The next best hope for an agreement on the subject may come in May at the WTO general council meeting in Geneva.
My take - Worth another go. (Spoiler from May - it didn’t work!)
Not just any contract renewal, this is an M&S contract renewal
Remember the crippling online outage that brought down UK retail bellwether Marks & Spencer for months last year, the one that cost it millions in revenue before everything was back up-and-running? Inevitably there has been a great deal of speculation about how the massive security breach was able to take place, with lots of unsubstantiated scuttlebutt about incumbent tech and services provider.
For its part, M&S has maintained a stoic silence on that subject, despite being ready to share its learnings from the incident with the rest of the retail sector. Perhaps we’ll never know everything that occurred over that fateful Easter weekend in 2025?
But one of M&S most high-profile tech providers has just had what looks like a big vote of confidence from the retailer as Indian services firm TCS is signed up for a renewed multi-year deal to continue to manage the retailers ongoing tech transformation program. According to Sacha Berendji, Operations Director, Marks and Spencer:
Technology transformation is a key strategic priority for M&S as we invest for growth. Having the right suite of partners, with access to the latest developments in AI and digital expertise is imperative. I am pleased that we are extending our partnership with TCS, who will work alongside our in-house team as we accelerate our digital transformation.
My take - Congratulations to TCS.
He also said what?
The way that I think about serving these customers today, it's done on a customer-by-customer basis. versus just serving a category of customers that buy cereal as an example, or buy size eight tennis shoes. It's individualized to the customer basis based upon their preferences, their data, their search history, what they like. And so I think it's a huge opportunity for us. People have talked about Walmart for years as having these rich data assets, but I don't know that, that has necessarily translated up to this point into the P&L benefits. We're going to be seeing that with what we're doing with agentic commerce.
John Rainey, Walmart CFO
This week’s AI sackings...
The reputation of AI as ‘job killer’ continues apace with 60% of enterprise C-Suite leaders admitting as part of a new global study that they’re planning layoffs among employees who can’t or won’t use AI. That’s on top of the 69% that admit to having already done layoffs and blamed AI as the driver.
AI Adoption in the Enterprise is a report from WRITER, based on a poll of 2,400 global employees and C-Suite leaders - half and half - using AI at work, pulled from the US, UK, Ireland, Benelux, France, and Germany.
The findings expose growing division within organizations, with a divide between the execs and the workforce as a whole. Some 29% of employees, including 44% of Gen Z staffers, admit to sabotaging their employer’s AI strategy, a practice which 76% of C-Suite respondents warns poses a threat to corporate future. Sabotage methods being used include entering proprietary company info, using non-approved AI tools, intentionally generating low quality outputs, and tampering with metrics to make it appear AI is under-perfoming
But the C-Suite is feeling under pressure to get on with AI adoption, with nearly two-thirds (61%) fearing for their own jobs if they don’t. Half feel their skills are becoming obsolete in AI age, while 45% worry they’ll lose their job in next year due to AI.
My take - Sounds all too credible to me.
And he also said what?
We've boasted about achieving profitability in the US from an e-commerce perspective when you include advertising and fulfillment services and these other parts of our business. An e-commerce transaction is still less profitable than someone going and taking something off one of our shelves than an in-store transaction. Within our planning horizon, though, we expect that to change. We expect that we will get to a point where an e-commerce transaction fully loaded with the other benefits that I talked about will become more profitable than an in-store transaction. John Rainey, Walmart CFO