• by Laurie Sullivan , Staff Writer, 2 hours ago

Despite Anthropic CEO Dario Amodei's call for a slowdown of AI development during the weekend that earned the backing of several other AI CEOs, retailers like Chewy are preparing for an agentic future.

U.S. Federal Trade Commission Chair Andrew Ferguson said Tuesday he was “deeply suspicious” of requests by large AI companies for regulation and an antitrust exemption.

“If companies are simultaneously coming to Washington and asking for a host of regulations and an antitrust exemption, all my alarm bells go off,” Ferguson said at an event in Washington Tuesday, reported Bloomberg Law. “Everyone should be deeply suspicious about this," he said, because the companies are asking for the government to instill "barriers to entry."

Those barriers would likely stall barriers that companies like Chewy have already seen.

Chewy uses AI in advertising by providing predictive tools to external brands through its retail media network, and by optimizing its own internal performance marketing to find new customers.

Last week it told investors during its earnings call that it estimates $50 million in annual cost savings because of its AI-related initiatives for its 2027 fiscal year. The pet supplier's fiscal year runs from Feb. 2, 2026 through Feb. 1, 2027.

“We continue to lower our variable cost to serve through automation, scale, operating discipline, and increasingly AI-enabled productivity,” Chewy CEO Sumit Singh said during the earnings call. “Importantly, our strengthening earnings profile also gives us the flexibility to reinvest in the business.”

To bypass the data bottlenecks that commonly stall retail AI initiatives, Chewy prioritized data before deploying customer-facing features.

Instead of pushing unrefined data into models, developers spent several quarters constructing a unified enterprise data platform and central AI tools. 

The company recently launched AI-enabled tools in customer care, pharmacy and vet services to help lower variable costs, reduce manual labor and improve productivity, Singh said during the earnings call.

Net sales came in at $3.33 billion -- up 7.3%, driven by active customers and higher retention rates.

The company estimates 21.7 million active customers, representing a 3.8% increase that includes 43,000 customers from SmartEquine, an equine health-focused business.

During the quarter, Chewy released its AI-powered assistant Cai -- which has been active for less than one month and was launched to select customers through its mobile app. 

Singh said Cai is being used in nearly one-third of orders, returns and account membership are resolved through its chat capabilities.

Less than 15% of the company's traffic has been exposed to Cai, according to Singh. The AI assistant supports self-service chats for orders, account management and autoship, and subscription services.

The goals behind implementing AI include improving customer experience, increasing employee productivity, and structuring lowering costs to serve consumers.

Chewy is preparing to introduce a redesigned Chewy Plus loyalty program to improve product fit per consumer that also integrates health-related benefits.

When Douglas Anmuth, managing director and analyst at J.P. Morgan, during the call asked about the CEO’s confidence in AI, Singh pointed out that “less than 10% or 15% of our traffic is exposed” to Cai, and it has only been in the market for less than one month. AI agents have become a new way to increase support for customers.

“We view AI as a powerful enabler of continued margin not as a stand-alone pool of savings that will flow directly into the bottom line,” Singh said.