Walmart launches generative AI search on Azure OpenAI Service, contributing to 22% global ecommerce growth in Q1 FY2025
Walmart built a generative AI-powered search engine using Azure OpenAI Service and proprietary retail models, enabling shoppers to submit natural-language, occasion-based queries and receive curated product bundles. The company reported 22% global ecommerce growth in the quarter when the capability went live.
Background
Walmart's digital customers performed multiple disconnected searches to accomplish single shopping goals — a fragmented experience reflecting the limitations of keyword search. The company sought to move to intent-aware, conversational search that understood the occasion behind a query, enabling a more seamless digital shopping experience. With ecommerce growing as a share of Walmart's business, improving digital discovery had direct revenue implications.
What Was Implemented
- Built a generative AI-powered search function across iOS, Android, and Walmart.com
- Combined Walmart's proprietary retail-specific models with foundation models via Microsoft Azure OpenAI Service
- Designed to interpret contextual, goal-based natural-language queries and return curated, personalized product bundles
- Announced at CES, January 2024, by Walmart CEO Doug McMillon and Microsoft CEO Satya Nadella
- Simultaneously deployed "My Assistant," a generative AI productivity tool for ~50,000 non-store associates, on the same Azure OpenAI infrastructure
Results
Walmart reported 22% global ecommerce growth in Q1 FY2025 (SEC Form 8-K, May 16, 2024). Over two fiscal years, ecommerce grew more than 20% annually, reaching 18% of net sales . The company credited investment in AI and experience-enhancing technologies among growth drivers, though the earnings release does not isolate the contribution of the AI search feature independently.
Lessons
- Goal-based, occasion-driven search requires combining general-purpose large language models with proprietary retail and product data — neither alone delivers the specificity needed
- Internal associate productivity tools can run on the same AI infrastructure as consumer-facing features, improving return on AI investment
- A company-level ecommerce growth figure and a specific AI feature can be reported together without the company quantifying a causal relationship — these claims should be kept analytically separate