Shinsegae Group Abandons OpenAI Collaboration for Reflection AI Partnership, Shifts Retail Strategy

Gate News message, April 17 — Shinsegae Group has suspended its collaboration with OpenAI just 11 days after announcing a strategic partnership on April 6, pivoting instead to an expanded partnership with U.S. AI company Reflection AI. The South Korean retail conglomerate announced on April 17 that it will accelerate projects applying AI across retail operations including product sourcing, inventory management, and customer management, following a memorandum of understanding signed with Reflection AI in March for building and jointly operating an AI data center.

The group cited "selective focus" as the reason for ending the OpenAI collaboration. The original plan involved separate infrastructure cooperation with Reflection AI and software cooperation with OpenAI; the company has now decided to consolidate these efforts under a single partner to prioritize AI-driven retail innovation and accelerate execution speed. Market analysts suggest the decision also reflects concerns about the limited differentiation of ChatGPT-based shopping functionality and the effectiveness of the AI commerce model, as embedding apps within ChatGPT mirrors existing service capabilities already offered by many companies.

The shift aligns with challenges facing AI commerce globally. Walmart, which partnered with OpenAI to test shopping features within ChatGPT, discontinued the service in March due to low conversion rates. According to Wired, direct purchases within ChatGPT achieved only about one-third the conversion rate of customers directed to Walmart's website. Additionally, concerns arose over inaccurate or outdated information regarding inventory status, shipping timelines, and delivery costs, with research firm Forrester noting that OpenAI faces difficulty obtaining sufficient product data exposure from retail partners' websites.