Verified
Costco
Piloting- Retail
- 355,000 employees
- No named AI platform
- Pharmacy AI in-stocks 98%+ (Dec 2025)
- AI search traffic up triple digits (Sep 2026)
Costco deploys AI inside the systems it already runs rather than through a named platform: an AI pharmacy inventory system that reorders stock on its own, AI tools rolling into its gas stations, and AI-enhanced costco.com product pages that help large language models surface its prices. CEO Ron Vachris calls the approach practical and member-focused, and the only business return Costco has tied to AI is in pharmacy, where in-stocks passed 98% and scripts filled grew at a mid-teen rate (Dec 2025).
costco.comTheir approach to AI
- The platform
- Costco has no named AI platform: AI sits inside its own systems, such as the pharmacy inventory system and costco.com product pages, while partners such as AskVet and Travelport supply member-facing AI, and Costco's IT runs on a Microsoft Azure hybrid cloud (Oct 2026).
- The models
- Costco has not named the models behind its AI; Constellation Research reported Google Cloud's Vertex AI in Dec 2025, and Gary Millerchip named Gemini, Anthropic and OpenAI in Sep 2026 as the AI search tools sending shoppers to costco.com.
- The reach
- Costco has not said how many of its 355,000 employees use AI tools, and Ron Vachris said in May 2026 that AI has not displaced anyone at Costco because the business is growing faster.
- The catch
- Costco has tied a business return to AI only in pharmacy, and does not describe as AI the recommendation carousels it credits with just under $500 million of online sales in Q3 FY2026.
Snapshot
- Employees
- 355,000
- Aug 30, 2026; about 95% in warehouses and distribution (FY2026 Form 10-K)
- Technology budget
- Not disclosed
- Capex of $6.4B in FY2026 covered warehouses, information systems and distribution; about $7.5B planned for FY2027
- AI/ML headcount
- Not disclosed
- Reuters reported a Hyderabad technology center starting with about 1,000 people (Jul 2025)
- Who owns AI
- No named AI chief
- EVP and CIDO Javier Polit runs technology and digital, reporting to CEO Ron Vachris (Oct 2026)
- Platform
- None named
- AI built into pharmacy, gas and e-commerce systems; IT runs on a Microsoft Azure hybrid cloud (Oct 2026)
- Models
- Not disclosed
- Google Cloud Vertex AI reported by Constellation Research (Dec 2025), not confirmed by Costco
- Reach
- Not disclosed
- No employee-wide AI assistant announced as of Oct 2026
- Use cases
- Pharmacy, gas, product pages, accounting and IT
- Named by Costco executives and Fortune, Dec 2025 to May 2026
Key findings
Ron Vachris said on Dec 11, 2025 that Costco's AI pharmacy inventory system, which compares drug prices across vendors and reorders stock on its own, lifted in-stocks above 98% and played an important role in mid-teen growth in scripts filled, the only business return Costco has tied to AI.
Costco has no named AI platform, AI chief or employee AI assistant as of Oct 2026; technology and digital sit under EVP and Chief Information and Digital Officer Javier Polit, who reports to CEO Ron Vachris.
Gary Millerchip said on Sep 24, 2026 that traffic to costco.com from AI search grew triple digits for a second straight quarter with the highest conversion rate of any traffic, and Costco uses AI to enhance its product pages and works with Gemini, Anthropic and OpenAI on how its products appear.
Costco credited personalized recommendation carousels with over $470 million of e-commerce sales in Q2 FY2026 and just under $500 million in Q3 FY2026 but has not said they use AI, while Ron Vachris said in May 2026 that the cost of AI in e-commerce is offset by greater sales.
Ron Vachris said in May 2026 that AI has not displaced Costco employees because the business is growing faster; Costco's headcount rose to 355,000 at the end of fiscal 2026 from 341,000, and its Oct 2026 Form 10-K added risk language on autonomous third-party AI systems.
Where Costco sits
- Stage
- Piloting
Costco sits at Piloting: a handful of named AI systems run in production, led by the pharmacy inventory system Ron Vachris credited with in-stocks above 98% and mid-teen script growth (Dec 2025), plus AI tools rolling into gas stations and AI-enhanced product pages (May 2026). Costco has not disclosed a sanctioned AI assistant for any employee group, and falls short of Scaling because it names no AI owner, has opened no company-wide AI platform to its 355,000 employees and reports a return for only one use case.
How the stages are defined - Ownership
- No named AI chief; CIDO Javier Polit runs technology and reports to the CEO
- Platform
- Hybrid: AI built into its own systems; partner AI for members
- Models
- Not disclosed; Google Cloud Vertex AI reported by Constellation
- Hosting
- Not disclosed; Microsoft Azure hybrid cloud and Costco data centers, with Google Cloud Vertex AI reported; partner AI runs on vendor systems
- Reach
- Not disclosed; no employee AI assistant announced
How they deploy
Practical and member-focused
Ron Vachris said in Dec 2025 that Costco is weaving AI into the business "in a very Costco way": practical, member-focused and grounded in tangible business value, and that Costco does not pursue technology for technology's sake. Vachris described two tracks: AI that improves the member experience, and AI that strengthens the basics of bringing goods to market at the lowest possible price, naming procurement and supply chain as areas of opportunity.
Core systems first
Ron Vachris said in Dec 2025 that Costco spent the previous few years building its core back-end systems and is now seeing the benefits reach members. Vachris called Costco's technology spending capital light in May 2026, with the cost offset by higher sales and productivity.
AI assists people; buyers still choose
Ron Vachris said in May 2026 that AI has not displaced Costco employees because the business is growing faster, that he does not see AI choosing items for Costco, and that AI will not do employee evaluations. Gary Millerchip said in Mar 2026 that Costco looks for places where AI can make employees more productive so that Costco can pay them better and deliver more value to members.
Showing up in AI search
Costco buys no paid digital advertising, Gary Millerchip said in Sep 2026, and sees AI search as a neutral place where its prices and quality can show up. Costco works with the leading AI companies and uses AI to improve its product pages, and Millerchip said members use AI mainly as a search tool, not yet for agentic commerce.
Gains go back into price
Costco reinvests efficiency gains in lower prices and wages: Gary Millerchip said in May 2026 that 80% to 90% of the value from retail media goes back to members, and Ron Vachris said in Dec 2025 that Costco will never give up being the best price for members.
- Deployment model
- Costco builds AI into the systems its operations already run on instead of offering a separate AI platform. EVP and Chief Information and Digital Officer Javier Polit runs information systems and digital and reports to CEO Ron Vachris, and Harish Rao leads global data and analytics. The businesses that use AI, such as pharmacy, gas stations and e-commerce, report results through the CEO and CFO on earnings calls, and member-facing AI services such as AskVet's Vera and Travelport's trip search come from partners. Costco has not described an AI center of excellence, a central AI team or an employee AI assistant.
- Model providers
- Costco has not named the models behind its pharmacy, gas or product page AI. Constellation Research reported in Dec 2025 that Costco runs Google Cloud's Vertex AI on top of a Microsoft Azure architecture, citing in part developer job postings; Costco has not confirmed it. Gary Millerchip named Gemini, Anthropic and OpenAI in Sep 2026 as the AI tools where sales that start in AI search are growing, and Costco works with those companies on how its products appear, a channel relationship rather than a disclosed model contract. Costco's partner AI comes with the vendor: AskVet's Vera for pet health, Travelport's Content Curation Layer for Costco Travel and, in 2018, SAP Leonardo for bakery forecasting.
- Data and infrastructure
- Costco chose Microsoft Azure as its hybrid cloud platform in 2017, according to Microsoft, and Constellation Research reported in Dec 2025 that Costco Travel runs on Microsoft Dynamics 365 on Azure. Costco's FY2026 Form 10-K describes critical IT systems, data centers and backup systems, and says Costco is making substantial investments in technology and digital resiliency. Costco's product recommendations draw on members' past search history, and Costco's member data falls under privacy laws including the GDPR, the California Consumer Privacy Act, HIPAA and China's Personal Information Protection Act. Costco has not said where its AI models run or whether member data may train outside models.
Platforms and internal tools
AI pharmacy inventory systemBy Dec 2025
Costco's pharmacy inventory system uses AI to compare prescription drug prices across vendors and reorder stock automatically and predictively, which Ron Vachris said lifted pharmacy in-stocks above 98% (Dec 2025). Gary Millerchip said in Mar 2026 that Costco had added new AI tools to improve pharmacy in-stock positions.
AI tools for the gas businessRollout under way in Dec 2025
Costco was deploying AI tools in its gas business in Dec 2025, which Ron Vachris said should improve fuel inventory management and lift sales by keeping Costco's pump prices the best value for members; Costco has not reported on the tools since.
AI-enhanced product pagesBy May 2026
Costco uses AI to enhance the product pages on costco.com so that large language models represent its prices, quality and included services, such as delivery and installation on appliances, and Costco works with the leading AI companies on how its products appear (May 2026).
Personalized product recommendationsSep to Nov 2025
Costco launched product recommendations based on members' past search history on costco.com and in its app in the first quarter of fiscal 2026, and later added personalized product placements and emails. Costco reports the sales these carousels drive but has not said whether AI models power them.
Vera AI for members (AskVet)
Costco offers members AskVet's pet telehealth platform at a discount, and Executive Members get free unlimited access to Vera AI, an AI agent that helps owners judge whether a pet needs a clinic visit; Costco's page calls Vera an informational tool that does not diagnose (checked Oct 2026).
Vendors and partners
Microsoft2017
Azure hybrid cloud; Dynamics 365 for Costco Travel · Microsoft told analysts in Oct 2017 that Costco had chosen Azure as its hybrid cloud platform, and Constellation Research reported in Dec 2025 that Costco's IT architecture is built on Azure.
Google
Vertex AI (reported); Commerce Media Suite and YouTube for Costco Retail Media; Gemini as an AI search channel · Constellation Research reported in Dec 2025 that Costco uses Google Cloud's Vertex AI, which Costco has not confirmed. Google listed Costco in its Commerce Media Suite in Mar 2026, and Costco launched a retail media collaboration with Google and YouTube in its third fiscal quarter of 2026.
OpenAI and Anthropic2026
AI search tools Costco works with on product visibility, alongside Google's Gemini · Gary Millerchip named Gemini, Anthropic and OpenAI in Sep 2026 as the AI tools where sales that start in AI search are growing at triple digits; Costco has not said it uses their models internally.
AskVet
Vera AI pet telehealth for Costco members · Executive Members get free unlimited access to Vera AI and one chat with a licensed professional, according to Costco's pet telehealth page (checked Oct 2026).
TravelportFeb 2025
Travel content and AI-powered trip search for Costco Travel · Travelport said Costco Travel would use Travelport+ with trip searches driven by its AI-powered Content Curation Layer under a multi-year deal; neither company has said when that search went live.
SAP2018
Machine learning for bakery production planning (SAP Leonardo) · Costco described a bakery machine learning prototype built with SAP Leonardo at SAP's 2018 Sapphire Now and ASUG conference; ASUG's account put the savings at nearly $100 million across 30 pilot locations, a figure Costco itself has not published.
Instacart
Same-day delivery partner · Consumer Reports and Groundwork Collaborative reported in Dec 2025 that Costco was among the retailers in AI-enabled price tests on Instacart run with Instacart's Eversight software; Instacart ended all item price tests on Dec 22, 2025.
Leadership
AI, data and platform leaders
Executives
AI org map
Technology and digital under one executive who reports to the CEO; AI built into business systems, with no separate AI office
Costco runs information systems and digital under EVP and Chief Information and Digital Officer Javier Polit, who reports to CEO Ron Vachris, according to the FY2026 Form 10-K. Costco has no published AI office or chief AI officer, and AI shows up inside existing operations such as pharmacy, gas stations and e-commerce. Harish Rao leads global data and analytics, a role that covers data, AI and marketing technology according to DataIQ, though Costco has not published Rao's reporting line.
Costco has not disclosed how many people work on AI or data. Costco's technology organization sits under EVP and Chief Information and Digital Officer Javier Polit, who reports to CEO Ron Vachris and oversees the information security team; Harish Rao leads global data and analytics, and Indy Cho has spoken for Costco on analytics and data products. Reuters reported in Jul 2025, citing two people familiar with the plans, that Costco would open its first technology center in India, in Hyderabad, starting with about 1,000 people; Costco did not immediately respond. About 95% of Costco's 355,000 employees work in its warehouses and distribution channels (Aug 2026).
Reporting lines
President and CEO
Ron Vachris
Information Systems and Digital
Javier Polit, EVP and CIDO
Reporting line stated in the FY2026 Form 10-K
Information Security
CISO, not named in filings
The CISO joined in Dec 2025 after the previous CISO left in Jun 2025
Global Data and Analytics
Harish Rao, VP
Covers data, AI and marketing technology (DataIQ, 2026); reporting line not published
Costco does not publish an org chart beyond its executive officer list; the FY2026 Form 10-K states only that the CIDO reports to the CEO and the CISO reports to the CIDO. Costco has not said where Harish Rao's data and analytics group or Indy Cho's analytics and data products team report, or whether either sits under Javier Polit.
Named people
Use cases
Costco has not published a count of its AI use cases; its executives have named AI in pharmacy inventory, gas station inventory, costco.com product pages, and accounting and IT work, and Costco offers members partner AI such as AskVet's Vera. Costco has tied a business return to AI only in pharmacy, where Ron Vachris said in Dec 2025 that the AI reordering system helped drive mid-teen growth in scripts filled and higher margins. Costco reports no firm-level AI return, and Gary Millerchip credited personalized recommendation carousels with just under $500 million of e-commerce sales in Q3 FY2026 without describing them as AI.
| Use case | Area | Status | ROI |
|---|---|---|---|
| AI inventory reordering Costco's pharmacy inventory system uses AI to compare prescription drug prices across vendors and reorder stock on its own, lifting in-stocks above 98% (Dec 2025); Costco added further AI tools for pharmacy in-stock positions by Mar 2026. | Pharmacy | In production | Mid-teen growth in scripts filled and higher margins, partly credited to the AI system (Dec 2025) |
| AI fuel inventory tools Costco began deploying AI tools in its gas business by Dec 2025 to manage fuel inventory and lift sales by keeping its pump prices the best value for members. | Gas stations | Pilot | |
| AI-enhanced product pages for AI search Costco uses AI to enhance costco.com product pages and works with large language model providers to clean up product data, so that AI tools from Google, Anthropic and OpenAI show its full prices and included services; traffic from AI search grew triple digits in Q3 and Q4 FY2026 from a low base. | E-commerce | In production | |
| Personalized product recommendations Costco recommends products on costco.com and in its app from members' past search history and personalizes product placements and emails, and 10% of costco.com orders included a personalized item in Sep 2026. Costco reports the carousels' sales but has not said the recommendations use AI. | E-commerce | In production | |
| Accounting and IT work Fortune reported in May 2026 that Costco uses AI in accounting and IT as well as pharmacy and gas stations, and Ron Vachris said the employees who previously did those tasks moved up into more forward-thinking roles. | Corporate functions | In production | |
| Vera AI pet telehealth Costco gives Executive Members free unlimited access to AskVet's Vera AI agent for pet health questions, plus one chat with a licensed professional, and sells discounted AskVet subscriptions to other members. | Membership | In production | |
| AI-powered trip search Travelport said in Feb 2025 that Costco Travel would use Travelport+ with faster, more intelligent trip searches driven by Travelport's AI-powered Content Curation Layer under a multi-year deal. | Costco Travel | Announced | |
| Bakery production forecasting Costco tested a machine learning model built with SAP Leonardo in 2018 to plan daily bakery production, raise productivity and cut waste in its bakery departments; Costco has not said whether the model is still in use. | Fresh foods | Pilot |
Adoption
Costco has not said how many employees can use AI tools or how often, and has announced no company-wide AI assistant for its 355,000 employees (Oct 2026). Costco's AI has spread one system at a time: a machine learning bakery test in 2018, CFO Richard Galanti's description of AI as in the early innings in Mar 2024, an AI pharmacy inventory system by Dec 2025, AI tools rolling into gas stations from Dec 2025, and AI-enhanced product pages by May 2026. On the member side, traffic to costco.com from AI search grew triple digits in Q3 and Q4 FY2026, and 10% of costco.com orders included a personalized item in Sep 2026.
By the numbers
Rollout, first pilot to today
Oct 2017
Microsoft told analysts that Costco had chosen Microsoft Azure as its hybrid cloud platform.
Jun 2018
Costco described a machine learning prototype, built with SAP Leonardo, that planned bakery production in 30 pilot locations, at SAP's Sapphire Now and ASUG conference.
Mar 2024
CFO Richard Galanti said Costco was in the early innings of AI, had heard from large outside AI companies, and was working with IT, the CEO and its operations and merchandising heads on where AI might fit.
Feb 2025
Costco Travel signed a multi-year deal with Travelport that includes trip searches driven by Travelport's AI-powered Content Curation Layer.
Jul 2025
Reuters reported that Costco would open its first technology center in India, in Hyderabad, starting with about 1,000 people.
Dec 2025
Ron Vachris said Costco had integrated AI into its pharmacy inventory system, lifting in-stocks above 98%, was deploying AI tools in its gas business, and had launched personalized product recommendations that quarter.
Mar 2026
Costco said it had added new AI tools for pharmacy in-stock positions and was working closely with the leading AI companies on how its products appear in AI shopping tools.
May 2026
Gary Millerchip said Costco now uses AI to enhance its online product pages, raising its relevance with large language models.
Sep 2026
Gary Millerchip said traffic to costco.com from AI search grew triple digits for a second straight quarter and 10% of costco.com orders included a personalized item.
Economics & controls
Spend and ROI
Technology spending
Costco does not disclose a technology or AI budget. Costco spent $6.4 billion on capital expenditures in fiscal 2026, for warehouses, information systems, manufacturing and distribution, and plans about $7.5 billion in fiscal 2027, and its FY2026 Form 10-K says Costco is making substantial investments in technology and IT projects. Ron Vachris called Costco's technology spending capital light in May 2026.
What AI itself costs
Costco has not disclosed what AI costs. Ron Vachris said in May 2026 that the AI Costco uses in e-commerce has a cost that greater sales and better expense ratios are offsetting.
Reported ROI
Costco reports no firm-level return on AI. The one business return Costco credits to AI is in pharmacy, where Ron Vachris said in Dec 2025 that the AI reordering system played an important role in mid-teen growth in scripts filled and improved margins while lowering prices. Costco also credits personalized recommendation carousels with over $470 million of e-commerce sales in Q2 FY2026 and just under $500 million in Q3 FY2026, and reported triple-digit growth in sales from personalized initiatives in Q4, but Costco has not attributed those sales to AI. The Motley Fool's transcript of the Q3 call renders that quarter's carousel figure as $5 billion, while CX Dive reported it as just under $500 million, in line with the $470 million of Q2.
Productivity and headcount
Gary Millerchip said in Dec 2025 and Mar 2026 that productivity gains from Costco's technology investments, such as membership scanning at entry, the digital wallet and prescanning baskets, fully offset wage increases and longer opening hours, and Ron Vachris said in May 2026 that front-end checkout technology has lowered payroll in those areas; Costco credits these gains to technology in general, not to AI. Costco employed 355,000 people at the end of fiscal 2026, up from 341,000, and raised the top of its US and Canada wage scales by $1.00 an hour in Mar 2026.
Governance and risk
Board oversight
Costco's Audit Committee oversees cybersecurity and information security risk, and the Chief Information and Digital Officer and the CISO present to it regularly, according to the FY2026 Form 10-K. Costco's Dec 2025 proxy statement describes no board committee or policy specific to AI.
Disclosed AI risks
Costco's FY2026 Form 10-K warns that autonomous AI, especially third-party systems that are hard to monitor, could bypass internal controls, leak data or breach privacy laws, and could produce inaccurate outputs that lead to unintended decisions. The same filing says AI shopping tools may change consumer habits and misstate Costco's prices or membership value, and that AI has sped up cyber threats; Costco's FY2025 Form 10-K had mentioned AI only in passing.
Human judgment
Ron Vachris said in May 2026 that AI will not choose the items Costco sells, a job he leaves to skilled buyers, and will not conduct employee evaluations at Costco.
Security leadership
Costco's previous CISO left in Jun 2025, and a new CISO with more than 20 years in pharmacy, finance and consulting joined in Dec 2025, reporting to Chief Information and Digital Officer Javier Polit, who reports to Ron Vachris.
Third-party AI pricing
Consumer Reports and Groundwork Collaborative reported in Dec 2025 that Costco was among the retailers in AI-enabled price tests on Instacart, run with Instacart's Eversight software, that showed shoppers different prices for identical items; Costco did not comment, and Instacart ended all item price tests on Dec 22, 2025. Gary Millerchip said in Sep 2026 that Costco guards its pricing authority with members closely.
Member-facing AI
Costco's AskVet page says Vera AI is an informational tool that does not diagnose or advise treatment and does not replace an in-person veterinary exam.
Recent signals
Oct 7, 2026
Costco filed its FY2026 Form 10-K, which adds risk language on autonomous third-party AI systems, inaccurate AI outputs, AI shopping tools and AI-accelerated cyber threats, and reports 355,000 employees.
Sep 24, 2026
Gary Millerchip said traffic to costco.com from AI search grew triple digits for a second straight quarter, that appliances and consumer electronics lead sales starting in AI search, and that 10% of costco.com orders include a personalized item; he named Gemini, Anthropic and OpenAI as the AI tools involved.
Jun 1, 2026
CX Dive reported that Costco's personalized recommendation carousels contributed just under $500 million in digital sales in Q3 FY2026, up from $470 million the prior quarter, and converted three times better than Costco's typical rate.
May 28, 2026
Costco said it now uses AI to enhance its online product pages and launched a retail media collaboration with Google and YouTube, and Ron Vachris said the cost of AI in e-commerce is being offset by greater sales.
May 2026
Ron Vachris told the Economic Club of Chicago that AI has not displaced Costco employees because the business is growing faster, and that AI will not choose Costco's items or do employee evaluations.
Mar 24, 2026
Google listed Costco among the retailers whose commerce audiences brands can activate through Display & Video 360 in Google's Commerce Media Suite.
Mar 5, 2026
Gary Millerchip said Costco had added new AI tools to improve pharmacy in-stock positions and that personalized recommendation carousels drove over $470 million of e-commerce sales in the quarter, and Ron Vachris said Costco is working closely with the leading AI companies.
Dec 22, 2025
Instacart ended all item price tests on its platform after Consumer Reports and Groundwork Collaborative reported AI-enabled price tests at retailers including Costco; Costco did not comment.
Dec 11, 2025
Ron Vachris said Costco's AI pharmacy inventory system lifted in-stocks above 98% and helped drive mid-teen script growth, that Costco was deploying AI tools in its gas business, and that Costco approaches AI in a very Costco way.
Dec 2025
A new Costco CISO with more than 20 years in pharmacy, finance and consulting joined, filling a role Costco's Deputy CISO had covered since Jun 2025.
Quick answers
- How does Costco deploy AI?
- Costco deploys AI inside the systems it already runs rather than through a named platform: an AI pharmacy inventory system that reorders stock on its own, AI tools rolling into its gas stations, and AI-enhanced costco.com product pages that help large language models surface its prices. CEO Ron Vachris calls the approach practical and member-focused, and the only business return Costco has tied to AI is in pharmacy, where in-stocks passed 98% and scripts filled grew at a mid-teen rate (Dec 2025).
- What does Costco use AI for?
- Costco has not published a count of its AI use cases; its executives have named AI in pharmacy inventory, gas station inventory, costco.com product pages, and accounting and IT work, and Costco offers members partner AI such as AskVet's Vera. Costco has tied a business return to AI only in pharmacy, where Ron Vachris said in Dec 2025 that the AI reordering system helped drive mid-teen growth in scripts filled and higher margins. Costco reports no firm-level AI return, and Gary Millerchip credited personalized recommendation carousels with just under $500 million of e-commerce sales in Q3 FY2026 without describing them as AI.
- Who leads AI at Costco?
- AI at Costco is led by Javier Polit (Executive Vice President, Chief Information and Digital Officer); Harish Rao (Vice President, Global Data and Analytics); Indy Cho (Analytics and data products leader (VP or AVP; titles vary by source)). Ownership of AI on the org chart: No named AI chief; CIDO Javier Polit runs technology and reports to the CEO.
- What AI platform does Costco use?
- Costco has no named AI platform: AI sits inside its own systems, such as the pharmacy inventory system and costco.com product pages, while partners such as AskVet and Travelport supply member-facing AI, and Costco's IT runs on a Microsoft Azure hybrid cloud (Oct 2026).
- Which AI models does Costco use?
- Costco has not named the models behind its AI; Constellation Research reported Google Cloud's Vertex AI in Dec 2025, and Gary Millerchip named Gemini, Anthropic and OpenAI in Sep 2026 as the AI search tools sending shoppers to costco.com.
- How many Costco employees use AI?
- Costco has not said how many of its 355,000 employees use AI tools, and Ron Vachris said in May 2026 that AI has not displaced anyone at Costco because the business is growing faster.
- How far has AI spread at Costco?
- Costco sits at Piloting: a handful of named AI systems run in production, led by the pharmacy inventory system Ron Vachris credited with in-stocks above 98% and mid-teen script growth (Dec 2025), plus AI tools rolling into gas stations and AI-enhanced product pages (May 2026). Costco has not disclosed a sanctioned AI assistant for any employee group, and falls short of Scaling because it names no AI owner, has opened no company-wide AI platform to its 355,000 employees and reports a return for only one use case.
Open questions
- Which models power Costco's pharmacy, gas and product page AI, and does Costco run them on Microsoft Azure, Google Cloud's Vertex AI or its own data centers?
- Who owns AI at Costco, and do Harish Rao's global data and analytics group and Indy Cho's team report to Javier Polit?
- Do Costco employees have a sanctioned generative AI assistant, and how many use AI tools each week?
- Do Costco's personalized recommendation carousels, credited with $470 million and just under $500 million of quarterly e-commerce sales in fiscal 2026, run on AI models, and how much of that revenue is incremental?
- What have the AI tools in Costco's gas business delivered since deployment began in Dec 2025, and do they run at every Costco gas station?
- What business return do Costco's other AI uses deliver, including AI-enhanced product pages, accounting and IT work, and AskVet's Vera for members?
- How much does Costco spend on AI, given that it reports no technology budget and Ron Vachris called its technology spending capital light?
- What AI and data work will Costco's Hyderabad technology center, reported by Reuters in Jul 2025, take on, and how many people work there now?
- Is Costco's 2018 machine learning bakery forecasting model still in use, and what has Costco itself measured it saving?
- Does Costco have a written AI policy or governance body, given that its proxy statement and board committee descriptions do not mention AI?
- Will Costco let outside AI shopping agents act for members, given that Gary Millerchip said in Sep 2026 that members use AI mainly for search?
Sources
Filings and earnings calls
- Costco FY2026 Form 10-K (filed Oct 7, 2026)
- Costco FY2025 Form 10-K (filed Oct 8, 2025)
- Costco FY2024 Form 10-K (filed Oct 9, 2024)
- Costco proxy statement for the Jan 15, 2026 annual meeting (Dec 2025)
- Costco 8-K: Ron Vachris elected CEO effective Jan 1, 2024 (Oct 2023)
- Q4 FY2026 earnings call transcript, The Motley Fool (Sep 24, 2026)
- Q3 FY2026 earnings call transcript, The Motley Fool (May 28, 2026)
- Q2 FY2026 earnings call transcript, The Motley Fool via Webull (Mar 5, 2026)
- Q1 FY2026 earnings call transcript, The Motley Fool (Dec 11, 2025)
- Q2 FY2024 earnings call transcript, The Motley Fool (Mar 7, 2024)
- Mondelez International third-quarter 2022 results, naming Javier Polit Chief Digital & Information Officer (Nov 2022)
- Costco 8-K: Gary Millerchip named CFO effective Mar 15, 2024 (Feb 6, 2024)
Partners
News and analysis
- Fortune: Costco CEO Ron Vachris on AI and jobs (May 28, 2026)
- Supermarket News: Costco tech moves at the retailer's own pace (Jun 4, 2026)
- CX Dive via Yahoo Finance: Costco's digital personalization effort drives $500M in digital sales (Jun 1, 2026)
- Digital Commerce 360: Costco ecommerce sales, Q4 FY2026 (Sep 25, 2026)
- Retail Customer Experience: Costco CEO and CFO on AI and online sales (Mar 17, 2026)
- Constellation Research: Costco approaching AI in a very Costco way (Dec 15, 2025)
- CFO Dive: Costco's AI and tech use helps offset healthcare costs (Dec 12, 2025)
- DataIQ 100, 2026: Harish Rao, VP, Global Data and Analytics, Costco
- Reuters via Yahoo Finance: Costco to set up global capability centre in India (Jul 21, 2025)
- CBS News: Instacart ends AI price tests for retailers (Dec 23, 2025)
- Fortune: Instacart may be raising grocery prices using AI (Dec 10, 2025)
- The Washington Post via Anchorage Daily News: Instacart halts AI testing program (Dec 22, 2025)
- ITPro: Microsoft hits $20 billion cloud target early, with Costco choosing Azure (Oct 2017)
- Confectionery Production: Mondelez appoints Javier Polit chief information officer (Mar 17, 2020)
Data confidence
- Confirmed
- Stated in a primary or reputable public source.
- Estimated
- Derived or approximated from public reporting.
- Unconfirmed
- Reported, but not yet corroborated.
Costco profile · Enterprise AI diffusion report by Imagine · facts checked against their sources on Oct 31, 2026
