Instacart's AI Revolution: Unveiling 150 New Models Ahead of IPO

0:00So the big story here is that of course while Instacart is gearing up for its IPO it's slated to happen this September and that's according to a bunch of reports and so you know very very soon soon. potentially this month. But the company is not holding back on its tech heavy announcements. So today, Instacart revealed significant updates to its storefront platform, which is an e-commerce engine that powers more than 550 retail brands like Costco, Price Chopper, Market32, and Topps Friendly Market. And the newly updated platform is leveraging technology from chat gpt as well as instacart has kind of their in-house ai models but essentially what's going on here um is that you know of course instacart is a bit of a pioneer in grocery e-commerce tech they're based in san francisco they're founded back in 2012 and they have been positioning themselves as more than just a delivery service right when you think of instacart you probably think of like i don't want to go to the grocery store let me order an instacart to go do my shopping for you they're trying to be more than that you're really they're trying to be like a technology platform.

1:07And apparently right now they're actually controlling around 22 % of the U S is$132 billion online grocery delivery market. Now to be a hundred percent honest, I don't necessarily directly use Instacart, but I believe like, okay, so I have, well, like my family, we use Walmart shopping. So, uh, my wife decided she does not like going to Walmart to shop. If she doesn't have to, the store is massive. We got a couple of kids. They don't have a fun time. It's just like a hassle keeping your kids in the car, not throwing fits or throwing things or wanting everything, whatever. It's just not a great time.

1:41I don't know. Maybe when they get older, it'd be more fun. But right now, Walmart is not a fun trip for our family. So my wife found out it's like a hundred bucks a year. It's super, super cheap. And you get Walmart delivered to you, at least where we live. So we've been doing that. And I like to say like, oh yeah, we don't use this car. We just use Walmart delivery. But actually sometimes think that uh walmart like outsources to instacart if they don't have enough drivers i could be completely wrong about this but i swear i've seen people that are like doing instacart delivery uh and they're like dropping off for walmart they also do the thing where like you pay like a fee so like in my mind i'm like oh yeah it's like 100 bucks and that's just the fee and they're gonna like it's just won't it's on walmart they're gonna like deliver my groceries but then when the delivery driver drops it off it's like give your delivery driver a tip and i'm like oh like i just i don't know i i'm just like a hater on tipping and tipping culture in general so like don't mind me if that's triggering to you and you're a walmart driver and you wish you got bigger tips i just i wish all tipping was just like integrated into the price of whatever you buy i just don't like the awkwardness of like you know did i tip too much did i not tip enough do i let's just like give me the full price i'm happy to pay i would be more happy to pay a higher price with the tip included than a lower price where I pick the tip I just it's an extra like you know yeah you only have so many like things in a day to think about and do and I don't know it's just not my thing but whatever in any case so I probably use Instacart but um I've been using Walmart is kind of like the main thing in any case um Instacart has a big chunk of the market but I wonder like what percentage of that is exclusively on the Instacart app and what what percent is maybe like other third-party people like off loading to it I think it's really smart they've gone in with Costco and they're doing deliveries for Costco.

3:22That's amazing. I just went to Costco today. It was a fiasco. Of course, it's a Saturday, so it's crazy. But yeah, good job on Instacart. They're definitely solving a major pain point, as you can hear me sitting here for like 10 minutes talking about all my pain of grocery shopping. In any case, they currently have a relationship with OpenAI. And actually, it was one of the first integrations. It was one of the first people to integrate chat gpt plugins back in march when that launched um they had uh they had like an ask instacart chat gpt feature in their app back in may so i think the new storefront that they've just launched is built on the same kind of robust infrastructure that underlies the instacart app and it offers retailers access to features driven by what instacart claims are 150 proprietary ai models right that's crazy um i've heard a lot of people talk about the fact that But, you know, like GPT-4, for example, is allegedly like 16 AI experts kind of tied together.

4:19When you ask GPT-4 a question, it figures out which of those. So I'm assuming this is kind of the same idea with Instacart where, you know, they say there's 150 proprietary AI models. And that's probably like all looped together in one thing, but they got like 150 experts or whatever. So, I mean, cool. It makes sense. I think you can get stuff more. You get more specific quality results doing this strategy. And, yeah, that's a no-brainer. So I think this new level of AI integration allows customers to pose open-ended questions like, you know, what ingredients do I need for fish tacos or what's a healthy lunch option for my kids?

4:53They can ask it directly into the search bar and you do it into, you know, a bunch of participating retailers, online storefronts, and it's going to give you the responses. So Asha Sharma, who's Instacart COO, said, quote, we've long believed the future of grocery and commerce in general isn't online or in store. It's both. And now more than ever, it's being supercharged with AI. So according to Sharma, the company's advantages kind of lie in its dynamic grocery catalog, which they have touted as one of the largest in the industry. So it includes 1.4 billion items and updates more than 6 ,000 items per second, which of course has over a decade's worth of data in online grocery shopping behavior.

5:34So the advancements, I think, in all of this are not limited to online interfaces. So the company's smart carts, known as Caper Carts, also received a pretty substantial upgrade. So these carts, which are a product of Instacart's$350 million acquisition of Caper AI in 2021, come with a huge array of features, including touchscreens, scales, and sensors. So customers can not only bag items as they shop, but they can also order custom items like deli sandwiches directly from the cart itself. and then when the custom order is ready a notification is sent for pickup it's kind of nice right you don't have to go to the deli just do it from your phone go to the deli when your sandwich is ready so i think the latest improvements are also kind of you know there to enhance the capabilities of cart's camera and weight sensors which are delivering a more kind of fluid shopping experience while enhancing the detection of any suspicious activity So I think that as Instacart is kind of looking towards this IPO that may be on the horizon for them probably very soon, I think these updates signify its ambition to be a technology first company that really kind of straddles the line between the physical and digital worlds with a focus on enhancing both customer experiences and operational efficiency through AI.

6:49So Instacart is clearly aiming to lead the charge in this rapidly evolving grocery commerce landscape. And I think by you know putting out a bunch of these new features a bunch of this new ai 150 different ai models apparently that they have um they're really kind of saying look we're definitely a software company we're not just because we have like a lot of um we have like the element of the human drivers it's kind of like you know if someone was saying uber wasn't a software company which i there's like a lot of debates right even like tesla people are saying you know they say like is this a car company is this a tech company tesla wants to be a tech company because the valuations are much higher, the multiples are much higher.

7:25And so they work really hard to have a lot of AI and software and, you know, self-driving and those kinds of things to be like, look, no, we're a tech company, not just a car company. And so I think, you know, Instacart wants to make sure they're definitely, you know, saying we are a tech company, especially as they're looking for investors and IPO on the horizon, and they want to make sure their valuation is as high as possible and stays that way for as long as possible.