Chewy expects artificial intelligence to reduce operational costs by $50 million in fiscal 2027. This figure represents an increase from the low tens of millions of dollars projected for the current fiscal year, according to CEO Sumit Singh.
The company launched an AI assistant named Cai, which currently handles approximately 30% of customer chats without human intervention. The assistant is available to a select group of mobile app users and manages requests related to orders, returns, and account management.
Internal AI tools are assisting service agents by aggregating data from multiple software systems, which helps new employees match the performance of experienced staff. Additionally, AI is used in pharmacy operations to validate data and in veterinary clinics to manage appointments.
More than 50% of Chewy’s volume is processed through automated facilities. The company developed its AI infrastructure internally over several quarters to ensure data readiness, aiming to maintain a long-term operational advantage.
The projected $50 million in savings will not be treated as a standalone profit pool. Instead, the company plans to use these funds to offset cost pressures like wage inflation or to reinvest in marketing, new products, and the Chewy+ membership program.
