Nvidia Reports Surge in AI Adoption Among Retailers

Artificial intelligence (AI) is increasingly becoming a central theme in the retail sector, as highlighted at the recent National Retail Federation (NRF) annual event held in New York City. The 2025 event showcased a shift from technology discussions to a focus on practical applications and business outcomes. Concurrently, Nvidia Corp. released its report, State of AI in Retail and Consumer Packaged Goods, revealing significant advancements in AI deployment among retailers and consumer packaged goods companies.

According to the report, 58% of surveyed companies are actively deploying AI solutions, a notable increase from 42% last year. This uptick indicates a growing maturity in the retail sector as organizations move from experimenting with AI to implementing it in regular operations. Overall, 91% of the retail industry is now engaged with AI, whether by actively using it or assessing its potential.

AI’s impact on business operations is substantial. A remarkable 89% of industry leaders surveyed by Nvidia reported that AI has contributed to revenue growth, while an impressive 95% noted it has helped reduce annual costs. Furthermore, 92% of executives indicated plans to increase their AI budgets in the coming year. The report also highlighted a rise in both customer-facing and back-office AI applications, particularly in digital commerce, which saw a growth in use from 57% to 61%.

Emergence of Agentic AI in Retail

A significant trend emerging from the report is the development of agentic commerce, where AI agents respond to customer intent rather than merely providing recommendations. This shift is exemplified by the introduction of shopping assistants that offer personalized assistance to customers. Nearly half of the respondents, 47%, reported using or evaluating agentic AI. They identified three key goals for these AI agents: boosting speed and efficiency (57%), enhancing customer experiences and personalization (40%), and improving decision-making through real-time data (40%).

To facilitate broader AI adoption, Nvidia is advocating for an open mandate to democratize access to AI tools. At the NRF event, Azita Martin, Nvidia’s Vice President and General Manager for AI in Retail, CPG, and QSR, emphasized the importance of openness and interoperability. She stated, “As retailers start deploying AI agents at scale, the cost of inference can become very high. Nvidia is focused on optimizing inferencing speeds and reducing costs of open-source models.”

Martin explained that many retailers initiate their AI projects in the cloud using frontier models such as OpenAI and Gemini. However, as the number of agents increases, so does the cost of inference due to the extensive token generation required for reasoning.

The survey findings reveal that 79% of companies recognize the importance of integrating open-source models into their technology stacks, allowing greater control over AI training with their own data. Nvidia has also introduced two open-source AI blueprints aimed at modernizing retail operations without replacing existing systems.

Innovative Blueprints Revolutionize Retail Operations

The first blueprint, Multi-Agent Intelligent Warehouse, focuses on improving supply chain operations. It employs AI agents that function on top of existing systems, acting as an AI command layer that mirrors real warehouse roles. This innovation transforms fragmented telemetry into real-time, evidence-backed recommendations addressing issues like bottlenecks and equipment health.

The second blueprint, Retail Catalog Enrichment, leverages generative AI to enhance basic product images and data into comprehensive descriptions for marketing use. For instance, a home goods retailer can utilize the Nemotron vision language model to create detailed product metadata, including color and material, thereby enriching search results and recommendations.

Nvidia’s strategy aims to support retailers in deploying agentic AI across their operations. The company envisions a future where AI is more directly integrated into warehouses and stores, enabling real-time insights to optimize inventory and supply chain issues with minimal manual intervention.

Despite ongoing supply chain challenges, with 64% of industry leaders noting increased difficulties over the past year, AI is seen as a solution to enhance operational efficiency (cited by 51% of respondents), meet customer expectations (mentioned by 45%), and improve traceability and transparency (noted by 38%).

Physical AI is also emerging as a potential game-changer in addressing supply chain issues. It connects AI to cameras, sensors, and robotics, facilitating the creation of digital twins of warehouses and stores. These digital twins can evaluate new layouts and operations, predicting throughput before physical implementation. Although only 17% of companies are currently using or evaluating physical AI, early adopters report its benefits in intralogistics simulation and optimization, robotic operations, and smart automation.

As the industry progresses, initial hurdles surrounding AI adoption are beginning to diminish. Concerns about data readiness have lessened significantly, with only 13% of companies citing training data as a top challenge, down from 27% the previous year. Similarly, privacy and data sovereignty issues have decreased from 22% to 18%.

Retail, traditionally viewed as cautious in adopting new technologies, is now among the fastest sectors to embrace AI. Research indicates that 90% of companies now compete based on customer experience, with 86% of consumers willing to abandon a brand after just one or two negative encounters. This heightened competition underscores the urgency for retailers to enhance their customer service capabilities.

While budget constraints remain a reality, Nvidia’s efforts to optimize AI costs are crucial. The company continues to encourage retail decision-makers to look beyond the initial expenses of chips and servers to consider the total cost of token generation, which is where Nvidia’s focus lies.

The evolving landscape of AI in retail presents both challenges and opportunities, as companies strive to leverage technology to meet the demands of an increasingly competitive marketplace.