Chart: Why retail is lagging behind other sectors in AI investment

Despite the massive potential that some retail executives feel artificial intelligence can bring to their businesses, retail-focused AI businesses are not drawing the same degree of private investment as other data-heavy sectors. 

That much is clear from the findings of the latest Stanford AI Index report, which showed that $1.17bn /£860m was invested in AI retail solutions in 2024. Compare that to manufacturing ($6.58bn/£4.86), cybersecurity and data protection ($3.73bn/£2.76) and healthcare ($10.8bn/£7.98bn). 

One of the reasons could be that retail lacks a killer use case for investors to coalesce around. That seems to be the case, according to data from Quid, the AI-driven consumer and market intelligence firm that provides the investment figures to Stanford for the report. 

They have shared a more detailed breakdown of the investment figures for last year. This data covers the sale of equity or debt by AI companies focusing on the retail sector. It does not include investment by retailers in their own AI solutions. 

The company raising the most money last year was Cart, with $290m (£214.2m). Quid categorises this as ecommerce management, given Cart provides an all-in-one solution for retailers, including Adidas, Juicy Couture and Guess to manage their online sales. 

Beyond that, investment is scattered across areas like analytics, robotic inventory management and other aspects of the ecommerce journey. The most direct application of generative AI tools, such as those offered by OpenAI and Anthropic, includes personalised shopping ($50m) and conversational ecommerce AI ($40.5m). 

What this makes evident is that retail is a business that is getting ever more complex, with plenty of room for improvement from automation across everything from pricing to retail media. That means it is currently hard to see what is going to be the first AI-driven revolution to truly upend the sector. 

“We’re seeing a broad range of retail applications attracting investment, with no single area emerging as the dominant focus,” said Quid principal AI and insights analyst Heather English. “This diversity suggests a landscape full of potential, though it remains to be seen where investor priorities will ultimately land.”