#232 – Walmart dark stores, Target wants to be Temu, & AI’s failed vending machine business

by Paul Drecksler | Jun 30, 2025 | Recent Newsletters

Hi Shopifreaks

Is AI ready to run a small business by itself? Is Target leadership running out of ideas? Can “dark stores” give Walmart a leg up in its battle against Amazon? Answers to these questions and more in this week's edition!

Btw, feel free to forward these editions to your colleagues or share the web versions in your Slack channels. Doing so keeps your colleagues in the know with e-commerce, helps me reach new readers, and makes you a champion for introducing such a valuable resource to your team. A true win-win-win! 😄

This week I cover:

Walmart testing dark stores
Target exploring a Temu-like model
Anthropic's failed vending machine business
Meta, TikTok, and Amazon coming for your TV screen
BigCommerce partners with Perplexity AI
LLM training is “fair use”
AI disrupting Big Tech's cash cows
OpenAI vs Microsoft & Meta
Poshmark's new Smart Sell feature
Google's new Doppl app
BNPL in your credit scores

All this and more in this week's 232nd Edition of Shopifreaks. Thanks for subscribing and sharing!

Stat of the Week

The number of publicly listed companies has been cut in half to about 4,000 since 1996. The past three years saw the fewest new listings since the financial crisis. Rett Wallace, founder of Triton, estimates that there is roughly $13 trillion trapped in private markets, causing a liquidity crisis that is killing the startup ecosystem.

1. Walmart tests dark stores to speed up fulfillment

Walmart is testing “dark stores” in Dallas that resemble a typical store, but have no signage and customers cannot come in. The store instead exists as a hub to speed up fulfillment and delivery of popular products ordered online by customers. The company also has another dark store in the works for Bentonville, Arkansas, where Walmart's corporate headquarters are, according to Bloomberg sources.

Walmart provided an incredibly ambiguous comment about the dark stores:

“We regularly test new tools, features, and capabilities to better connect with and serve our customers – wherever and however they choose to shop. Regardless of the channel, our goal remains the same: to deliver a fast, seamless, and engaging customer experience.”

Didn't Walmart already try this?

Yes, Walmart operated a handful of similar warehouse hubs during the mid-2010s through the pandemic before closing them. Perhaps it didn't make economic sense at the time to continue running those stores, however, online sales volume has significantly picked up. Online global revenue for Walmart has grown from around $13B in 2015 to over $100B annually 10 years later, and the company has since added new online categories like pharmaceuticals.

Also, Walmart launched its Walmart+ subscription service in 2020, offering unlimited free delivery from stores on orders $35 or more to compete with Amazon Prime, which now has tens of millions of members. In 2025, Walmart now has even more incentive to reduce the cost of last-mile delivery, which smaller regional dark stores can help with by reducing the distance between the fulfillment center and a customer's home.

Amazon's not letting Walmart have all the fun though.

Amazon announced its intention to bring same-day and next-day delivery of “everyday essentials” to “tens of millions” of households in more than 4,000 smaller cities, towns, and rural communities by the end of 2026. The company has already expanded its fast delivery options to over 1,000 small or rural communities this year and reports that over 90% of the top 50 items purchased for same-day delivery are everyday essential items.

The battle between Walmart and Amazon continues…

2. Target is exploring a factory-direct model like Temu and Shein

Target is testing a service that delivers products directly from factories to customer's homes, similar to how platforms like Temu, Shein, and most recently Amazon Haul operate. The effort aims to broaden the retailer's range of low-cost offerings such as apparel, household goods, and non-food items, according to Bloomberg sources.

A Target spokesperson said:

“In all cases, we uphold the high quality, responsible sourcing and sustainability standards that Target is known for and that consumers expect from us.”

Target has struggled to revive sales growth in recent years, and the company shares are currently trading down 28% so far this year, while the S&P 500 has risen 3.6%, which is pressuring management to shake-and-bake. It's also been dealing with a sustained consumer boycott following its decision to end diversity, equity, and inclusion practices earlier this year.

I understand Target's dilemma, but when has copying other retailers ever worked for the company? Remember…

a decade ago when Target followed Walmart into Canada, opened over 130 stores in two years, and then lost over $2B before pulling out of the country entirely by 2015?
in the 90s when Target launched SuperTarget stores to compete with Walmart Supercenters before ultimately scaling back the format to focus on smaller grocery sections in their regular stores?
when Target tried to shift away from its promotional pricing model towards “Everyday Low Prices” to be more like Walmart, but then couldn't actually compete on price?
when Target failed at launching dozens of private-label brands to compete with Walmart's Great Value and Equate brands?
back in 2017 when Target acquired Shipt for $550M so it could offer same-day delivery to its customers, only to have the brand name fade into the abyss?
in the early 2010s when Target introduced in-store clinics to compete with Walmart and CVS, but didn't know how to operate them, so they eventually sold them to CVS?
when Target was desperate to launch an Amazon Prime competitor, but couldn't figure out the offering, so it jumped from REDcard discounts to Cartwheel to Target Circle, without ever replicating the stickiness factor that Amazon and now Walmart have been able to achieve?
when Target had absolutely no clout, name recognition, or relationships with Chinese factories? Oh wait, that's now!

I'm not trying to hate on Target because I'm a fan. Back when I lived in the U.S., I always preferred to visit a Target store over a Walmart on any occasion. I'm just trying to demonstrate that playing copy cat with every competitor hasn't worked out so far for Target (it's not Meta), and I don't see it happening now with Target Haul (or whatever they call it, LOL).

Target needs to sit down, have a nice long look in the mirror, and ask, “Who am I?” And then build an offering for the next twenty years that reflects that answer. Because trying to be Walmart, Amazon, and now Temu and Shein is not the solution.

3. Anthropic let Claude run a vending machine in its office

In a newly published experiment entitled “Project Vend,” researchers at Anthropic, in partnership with Andon Labs, an AI safety evaluation company, let their AI model “Claudius” manage a vending machine in the company's office for a month to see how good it was at running a small business.

The model was tasked with:

Generating profits by stocking the vending machine with popular products that it could buy from wholesalers.
Maintaining a money balance above $0.
Ordering quantities of product that didn't exceed the machine's inventory limitations.
Communicating with vendors concisely.

The LLM was given a name, e-mail address, and inventory storage address to use when communicating with vendors.

The goal of the experiment was to better understand its model's capabilities and limitations in a test environment before seeing how the simulated research translated into the physical world.

Ultimately Anthropic determined that it would NOT hire Claudius because the AI agent made too many mistakes to run the shop successfully. However the company feels that the experiment was a success, despite its failure at the task itself, because it revealed clear paths to improvement.

Here's what Claudius did well:

It was good at using its web search tool to identify suppliers of specialty items requested by Anthropic employees.
It made several pivots in its business that were responsive to customers' needs, such as launching a “Custom Concierge” service within its Slack channel.
It subsequently denied orders for sensitive items after Anthropic employees tried to put it to the test.

Here's what Claudius did poorly:

It ignored lucrative opportunities, such as a customer's request to pay $100 for a six-pack of Irn-Bru, which could be purchased online for only $15.
It hallucinated important details, including the account that it instructed customers to send payments to! It also hallucinated conversations about restocking plans with people who did not exist.
It offered prices without doing any research, resulting in potentially high-margin items being priced below what they cost.
While it was able to successfully monitor inventory and order more products when running low, it was not great at increasing prices due to high demand.
It was cajoled several times via Slack messages into providing numerous discount codes and let other people reduce their quoted prices based on those discounts.
It did not learn from its mistakes. For example, when an employee questioned why Claudius was offering “employee discounts” at an employee-only store, it praised the person for making an excellent point, but didn't change course.

Ultimately Claudius was unsuccessful at making any money with its vending machine business, but Anthropic hopes to learn from the experiment, improve their process, and return with future attempts at potentially other AI-powered business endeavors.

4. Big Tech wants to takeover your TV experience

Your laptops and mobile phones aren't enough. Big Tech wants to consume your attention on on the TV screen too! Here's what went down last week in the world of digital television:

Meta leaders said they are planning to develop a version of the Instagram app designed for TVs that could show content like its Reels short-form videos. The company is seeking to attract older viewers and capture the higher advertising rates that come with connected TVs.

Can Meta actually pull that off though? iPad users have been waiting for a dedicated Instagram app for 15 years! At this rate, we'll have an Instagram TV app by 2040.

TikTok is also eyeing your television, with staffers internally discussing how to attract higher-quality (and potentially landscape) videos that look better on TV screens than the vertical videos that are designed for the TikTok mobile app. TikTok originally launched a TV app in November 2021, but recently discontinued it in mid-June, likely to be replaced by its upcoming new version.

To launch apps on connected TVs, the two companies would have to strike deals with makers of streaming TV operating systems like Roku, Amazon, and Samsung, which sometime include those platforms getting a cut of subscription of ad revenue generated by the app. Even then, there's no guarantee that the apps would get prominent placement on the TV menu, which has historically been reserved for paid streaming services like Netflix, Hulu, and Amazon Prime Video.

Google, in the meantime, which operates its own TV operating system that is available on Sony, Hisense, and TCL devices, as well as on Google's USB device that plugs into other televisions, reduced the budget (which is rumored to be around $500M) for Google TV and Android TV by 10%. However the company said that it is continuing to invest in its Google TV division with new user experiences including an upcoming integration of Gemini, so the reduction might just be part of Google's regular cuts.

Last but not least, Amazon is pushing to own your TV experience by becoming a hub for all your streaming subscriptions. The company has built a big business by letting viewers easily subscribe to other streaming services like HBO Max, Apple TV+, and Hallmark+ from within the Amazon Prime app or web dashboard, while taking a cut of the subscription rumored to be over 50%. However Amazon is still chasing holdouts like Peacock and Disney.

Remember paying for cable TV back in the day and still receiving commercials? Streaming television is about to get even worse…

5. BigCommerce & Feedonomics team up with Perplexity AI

BigCommerce and Feedonomics are now delivering structured product data directly to Perplexity’s AI search engine through a partnership aimed at helping brands surface more accurately in generative AI results.

The integration helps improve visibility, traffic, and conversions by ensuring merchants’ data is optimized for AI discovery, as e-commerce moves toward agentic shopping experiences powered by LLMs.

Taz Patel, head of advertising and shopping at Perplexity, said:

“Some aspects of the AI future are already clear—consumers want agentic experiences throughout their shopping journey, and they turn to Perplexity for accurate answers they can trust. When our systems can ingest clean, well-organized product information — with rich attributes, consistent taxonomy and up-to-date availability — the results speak for themselves: more relevant search experiences, higher conversion rates and better alignment with shopper intent. With Feedonomics delivering AI-ready data to Perplexity’s powerful and highly-trusted answer engine, we are setting a new standard for ecommerce search.”

This is not BigCommerce's first foray into AI.

BigCommerce began integrating Google Cloud's AI technologies into its platform as far back as July 2023, expanding on the partnership in Aug 2024 to bring additional AI tools powered by Google Vertex to merchants.

Given that BigCommerce prides itself on offering a wide range of partner selection to merchants (its UVP over Shopify which is more of a walled garden), I imagine that more AI partnerships are on the way.

6. Good news for AI companies: LLM training is “fair use”

Federal Judge Vince Chhabria ruled in favor of Meta over the authors who sued the company for training its large language model on their copyrighted works without obtaining consent. Chhabria ruled that Meta didn't violate copyright law after the plaintiffs failed to show sufficient evidence that its use of their work hurt them financially.

Does there have to be financial damages for copyright infringement to occur? Historically, no. That's where statutory damages have typically come into play.

Chhabria admitted that it is illegal to feed copyright-protected materials into LLMs without getting permission or paying the copyright owners for the work, but ultimately decided that Meta's training was considered fair use.

He wrote that by “training generative AI models with copyrighted works, companies are creating something that often will dramatically undermine the market for those works, and thus dramatically undermine the incentive for human beings to create things the old-fashioned way.” However, Llama isn't capable of generating enough text straight from books to violate fair use laws, and so the authors aren't entitled to the “market for licensing their works as AI training data.”

Chhabria noted that the authors should have focused on the argument that Meta copied their books to create a product that has the capability to flood the market iwth similar works, thereby causing market dilution, and that would've given them the win, but they barely touched the argument and presented no evidence of it.

While the authors may have lost the first argument, Chhabria confirmed that they would meet with Meta on July 11th to “discuss how to proceed on the plaintiffs' separate claim that Meta unlawfully distributed their protected works during the torrenting process.” This is where the statutory damages may come into play — because Meta did in fact torrent their books instead of buying them — which is illegal. (Or at least it has been in the past.)

The decision could set an early precedent in a growing number of copyright lawsuits involving generative AI and comes just a few days after a federal judge sided with Anthropic in a similar lawsuit. There are several other active lawsuits against AI companies for training their LLMs on copyrighted works including The New York Times suing OpenAI and Microsoft for training their models on its news articles, and Disney and Universal suing Midjourney for training its models on their films and TV shows.

The decisions also open the door to other questions including: What else is it fair use for AI companies to train their models with? My website content, including if I block their crawlers? My product and sales data? The lawsuits being decided now will have a lasting impact on just how much free reign access AI has to the web and digital content.

7. AI can only be so good before it disrupts Big Tech's cash cows

Will OpenAI kill Amazon's advertising business? Scot Wingo and Jason Del Rey discussed how Amazon's retail and ad dominance could be disrupted by AI companies in a very enlightening interview, which I'll share some highlights of below:

Wingo says e-commerce market share in the U.S. has settled somewhere between 15% and 20% of overall retail sales, which is way lower than Europe and Asia, and it's “because our user experiences have really stalemated or gone stagnant.”
Amazon in particular, he says, “totally stopped innovating on retail and have just started cash-cowing it.”
He says to imagine a world where someone builds an AI experience on top of Amazon, and no-one's using the Amazon front end anymore (something Amazon is actively trying to prevent), “there goes $60 billion of profit margin basically.”
What if OpenAI or Perplexity only charged a 5% take rate to sellers to list on their marketplaces. “So there’s a way you could really attack Amazon by getting rid of the ad business quickly, which would be pretty detrimental. And then I think you could chew away at a big chunk of the marketplace business.”
In response to how Rufus AI will help Amazon in the AI battle… “They’re good efforts, but I believe ChatGPT is going to be better. Part of it is that Rufus can’t be so good that you don’t need [Amazon’s product search] advertising. For Rufus to improve dramatically, it almost has to replace the existing search experience on Amazon. And that‘s a chasm Amazon’s not going to cross, because that would kill $60 billion of advertising revenue that’s essentially pure profit margin.”

The phenomenon of “AI can only be so good” that Wingo points out is evident across various tech sectors.

Google's AI answer engine can only be “so good” or it risks disrupting Google's ad platform disguised as a search engine.
Amazon's AI shopping assistants surfacing the best products for customers can only be “so good” or it disrupts the ad-dominated product discovery experience that rakes Amazon in billions.
Meta's AI content generation can only become “so good” before it risks alienating the users and creators that publish on its platforms.
Adobe's AI editing tools becoming “too good” could result in fewer editors needed to do the same amount of work, which means less human subscribers to its creative suite.
Apple's iOS getting “too good” with AI to accomplish daily user tasks could mean less apps needed to be purchased, which is a huge driver of revenue for the company.

Big Tech across the board is at risk of disrupting their own cash cow businesses in the pursuit of AI, which is still unproven in regards to how to monetize. (Subscriptions will eventually cap out.)

Imagine a world where your personal AI assistant only surfaces answers and product recommendations that it has a commercial interest in providing — because that's coming. The times they are a-changin'.

What are your thoughts? Hit reply and let me know or join the conversation on LinkedIn.

8. OpenAI vs everyone

In the previous two editions I reported that Meta is forming an AI Superintelligence Team with Mark Zuckerberg personally overseeing recruitment, offering compensation packages and signing bonuses reaching tens of millions of dollars. OpenAI CEO Sam Altman said that “none of our best people” had taken Meta's offers, but it was later revealed that OpenAI had been countering them.

I also reported that Microsoft is considering walking away from negotiations with OpenAI over its corporate restructuring, and that the two companies have clashed over Microsoft's future equity stake and access to OpenAI's technology.

Since then the war between OpenAI and… well, everyone… has heated up. Here's what's gone down:

It was revealed by The Information that OpenAI has been gearing up to take on Google and Microsoft with features that let people collaborate on documents and communicate via chat in ChatGPT. The new features would pit OpenAI more directly against Microsoft and Google in this arena and reflects Sam Altman's strategy to make ChatGPT a “supersmart personal assistant for work.”
OpenAI acqui-hired the team behind Crossing Minds, a startup backed by Shopify, Index Ventures, and other VCs that provides AI recommendation systems to e-commerce businesses.
Meta successfully poached a total of eight OpenAI researchers (and counting), as the company continues to outbid OpenAI for talent.
The definition of AGI came into question by Microsoft executives. The contract between Microsoft and OpenAI stipulates that OpenAI will be able to limit Microsoft's access to its future technology once the company reaches “artificial general intelligence,” or AGI, and now Microsoft fears that Sam Altman will prematurely declare AGI to get out of their agreement early.
Meanwhile, Microsoft salespeople are struggling to sell the company's Copilot AI assistant to corporations because many of their employees want to use ChatGPT — which they feel is more user friendly. (I agree.)
Jason Rugolo, founder of hardware startup Iyo is suing OpenAI for infringing on its trademark of the name “io” in its hardware venture with Apple's former chief designer Jony Ive. Rugolo later blasted Altman for discussing the case publicly on X and said that he looks forward to competing with him fairly on product, “you just can't use our name.”

It's been a while since an American homegrown company has grown big enough to compete with Microsoft, Google, and Meta — let alone all at once! I hope they're ready…

9. Other e-commerce news of interest

Poshmark is testing a new Smart Sell feature that allows sellers to automate offers with minimum prices for acceptance, similar to minimum offer options on eBay, Mercari, and Depop. Some sellers have seen the feature, and others say they saw it earlier but it has now disappeared, so it's unclear whether this is a test or a phased rollout. Poshmark also released new tools aimed at making refreshing old listings easier including a way to filter and duplicate old listings.

Google launched New Customer Promotions for Shopping ads, which lets brands offer exclusive discounts to new buyers directly in their paid listing and have them auto-applied. The feature offers a way for brands to boost click-thru and conversion rates and stand out in SERPs to help them turn first-time browsers into buyers. The feature is only available on paid Shopping ads and not included for free listings.

StockX partnered with Shopify to allow sellers to manage their StockX listings and orders directly from their Shopify backend. The new StockX Sales Channel app provides a more streamlined approach for sellers to manager their inventory, receive and fulfill orders in real-time, and automatically update their inventory. Last September, StockX partnered with Walmart to bring hundreds of pre-verified sneaker listings to Walmart.com, marking its first-ever integration with an external marketplace.

TikTok rolled out a new feature called LIVE Fan Club that automatically adds users who send “Heart Me” gifts during livestreams to the creator's Fan Club. To maintain their membership status, fans have to remain active within seven days of a creator's livestream and complete “missions” such as watching livestreams, commenting in chat, and sending virtual gifts. Fan Club members receive exclusive perks like access to chat rooms, special badges, and entrance spotlights when joining livestreams.

TikTok also introduced Countdown Bidding, a new auction-style feature where TikTok Shoppers can bid on items directly in a seller's livestream. Sellers set a starting bid price and timeframe and then shoppers can join the livestream, bid on the item, and pay for it if they win, all from directly within the livestream experience. TikTok also raised the price cap on its platform from $7,600 to $13,000 for high-value items.

Google released new app called Doppl for iOS and Android that can create AI-generated clips of you wearing outfits you find on the web. All users have to do is upload a full-body photo of themselves alongside a screenshot of the outfit they want to try on and the app generates a still image or a video after a couple of minutes. Last month Google introduced a shopping experience in AI Mode that included virtual try-on technology. Doppl builds on these capabilities, while bringing additional experimental features like the ability to use photos or screenshots to try on outfits, plus AI-generated videos to give users a better idea of how an outfit might look on them.

YouTube is rolling out new AI-powered features to help users find content more easily such as a search results carousel similar to Google's AI Overviews, as well as testing conversational AI with more users. The new AI search results carousel, available to YouTube Premium users in the U.S., suggests videos and displays brief AI-generated topic descriptions to hep users find what they're looking for faster. The carousel could improve discovery for users, but could prove to be a pain point for creators who rely on video views to earn revenue on the platform.

FICO is launching two new credit scores this fall that incorporate BNPL data alongside traditional credit metrics. These new scores aim to give lenders deeper insight into consumer repayment behavior and help expand credit access, particularly for those whose first credit experience is through BNPL products. The move follows a joint study with Affirm and marks a growing shift toward integrating alternative financing data into mainstream credit assessments.

DoorDash announced the launch of their drone delivery service in the Dallas-Fort Worth area in partnership with Flytrex, following a successful pilot program. Over 30,000 households can now order food from dozens of local and national restaurants with delivery via Flytrex's autonomous drone fleet, with additional sites launching soon. The drones can carry up to 6.6 pounds, which covers the weight of most large pizzas or several McDonalds combo meals.

Bolt launched Bolt Connect, a new product designed to help marketplaces onboard merchants faster by handling the compliance, payouts, and infrastructure behind the scenes. The company also announced support for stablecoin payments, which will allow for faster settlement and the ability for operators to move money globally without relying on banks or card networks.

The U.S. Supreme Court upheld a Texas law requiring age verification to access adult websites, despite critics arguing that the law violates the First Amendment, overturning prior precedent set back in 2004. Justice Clarence Thomas said that the law “only incidentally burdens the protected speech of adults” and that no adult or child “has a First Amendment right to access such speech without first submitting proof of age.” The ruling may pave the way for broader online age verification requirements across platforms beyond adult content.

Some eBay buyers are being presented with an option to receive a gift card when requesting a return over “buyer's remorse” rather than having the refunded about go back to their original payment method. eBay is encouraging buyers to choose that option by advising that credit card refunds may be slower than the gift card option, taking 3-5 days to process. Value Added Resource notes that eBay changed its refund policy a few days ago to now include that refunds can go back to “your original or selected payment method,” opening up the possibility for other ways to fund the refunds (yuck, probably stablecoins).

A bipartisan group of senators has reintroduced the 2021 Open App Markets Act, which was a bill aimed at curbing the gatekeeper power that Apple and Google hold over the mobile app economy. If passed, the legislation would force the two companies to support third-party app stores, permit alternate payment systems, and stop penalizing developers for telling users about better prices outside of the app. The reintroduction of the bill follows similar moves in the EU under the Digital Markets Act.

The Federal Reserve will no longer use “reputational risk” as a factor in bank supervision, removing a barrier that often deterred banks from working with crypto firms. The move comes as Congress advances legislation to regulate stablecoins and digital assets, potentially opening the door for Wall Street to enter the space. The moves further legitimize crypto as an credible low-risk asset class as opposed to speculative and high-risk one.

ByteDance is shutting down 8th Note Press, its short-lived book publishing division that the company launched in 2023 to cash in on the popularity of its #BookTok community on TikTok. Literary agents and authors are criticizing ByteDance for shutting down so haphazardly, given how difficult it is to resell unpublished books to another publisher. 8th Note acquired more than 30 titles in its first year, but did not deliver any breakout blockbusters, which some say is because it did little to market any of the titles.

Canada said last week that it is moving forward with its digital services that that will hit companies like Amazon, Google, Meta, Uber, and Airbnb with a 3% levy on revenue from Canadian users, with plans to apply the tax retroactively, leaving U.S. companies with a $2B bill due at the end of the month. In response, President Trump said that he is suspending trade talks with Canada because of the tax, which he called “a direct and blatant attack on our country.” The Digital Services Tax Act was signed into law a year ago and has nothing to do with the recent trade war that President Trump began. However by Monday (today), Canada decided to scrap the tax “in anticipation of a mutually beneficial comprehensive trade arrangement with the United States.”

In other international tax news… Indonesia will now require online marketplaces to withhold income tax from sellers with annual turnover above 500M rupiah, which is around $31k USD, rather than having merchants pay income tax directly to the government. Indonesia has one of the lowest tax collection rates among major economies globally, and the rule change is designed to boost revived tax collection efforts.

Google Pay and Klarna partnered up to bring the company's BNPL payment options into the digital wallets of Android users. Existing Klarna users can link their accounts to Google Pay, while new users can register directly within the app. The addition of Klarna enhances Google Pay's BNPL offerings, which already include Affirm, Zip, and Afterpay. The move follows Google Pay cutting off support for PayPal earlier this month.

Amazon is investing £40B in the UK over the next three years to build four distribution centers, creating an estimated 4,000 jobs, and to renovate the historic Bray Film Studios, which it acquired in July 2024. Prime Minister Keir Starmer, who met with Amazon CEO Andy Jassy last week, said the announcement “adds another major win to Britain's basket and is a massive vote of confidence in the UK as the best place to do business.”

Facebook has been asking users for access to their phone's camera roll when creating a new Story to automatically suggest AI-edited versions of their photos, including photos that the user hasn't yet uploaded to Facebook. If a user clicks “Allow,” it gives Meta permission to upload media from their gallery to its cloud on an ongoing basis, which subsequently allows their media and facial features to be analyzed by Meta's AI. TechCrunch notes that being able to tap into the personal photos that users haven't yet shared could give the company an advantage in the AI race.

The U.S. House of Representatives’ Chief Administrative Officer informed congressional staffers that WhatsApp is now banned from government phones due to the app being a “high-risk to users due to the lack of transparency in how it protects user data, absence of stored data encryption, and potential security risks involved with its use.” Meta says it disagrees with the CAO's characterization of its messaging app and asserted that WhatsApp offers a “higher level of security than most of the apps” on their approved list which include Apple iMessage, Facetime, Microsoft Teams, Wickr, and Signal.

27% of U.S. consumers feel pessimistic about their finances over the next year, according to TransUnion's Q2 2025 Consumer Pulse study, up from 21% in late 2024 and marking the highest level since tracking began in early 2021. Optimism has declined from 58% in Q4 2024 to 55%, with Gen Z and Millennials remaining most optimistic about their future finances. Inflation and fears of a recession were top financial concerns of survey respondents.

Salesforce CEO Marc Benioff claimed during an interview with Bloomberg that as much as 30% to 50% of the company's work is now completed by AI, adding that businesses need to wrap their head around the idea that AI can do the type of tasks that opens the door for humans up to do higher value work. The company has already cut 1,000 roles this year.

TikTok content moderators in Turkey are speaking out about traumatic working conditions, including long hours, exposure to graphic, violent, racist, and sexual content, and a lack of mental health support. Workers reported that the job used to be easy, but that changed in 2023 with a surge in the volume and the violence in the posts and with workload skyrocketing from dozens to hundreds of posts a day. The worsening job conditions have led to efforts to unionize and organize for better protections in the industry.

President Trump said that he has identified a buyer for TikTok, but he won't provide the name for two weeks. He also noted that the deal will “need probably China approval” and that “President Xi will probably do it.” Trump's only clue as to the identity of the buyer was that, “It's a group of very wealth people.” What a shocker! The funny thing is — there's been an abundance of interested buyers since the divest-or-ban law was put into place under the Biden administration. I'm just not sure there's ever been a seller!

Aaron Sorkin is returning for a sequel to his Oscar-winning film, “The Social Network,” with a movie inspired by The Wall Street Journal's 2021 investigative series, The Facebook Files. While the 2010 film chronicled Facebook's founding, the new sequel will examine its societal impact on youth mental health and misinformation. Is Jesse Eisenberg reprising his role as Mark Zuckerberg? The answer has not yet been revealed.

🏆 This week's most ridiculous story… Scale AI routinely uses public Google Docs to track work for high-profile customers like Google, Meta, and xAI, leaving multiple AI training documents labeled “confidential” accessible to anyone with the link, according to a Business Insider investigation. The company also left public Google Docs with sensitive details about thousands of its contractors that can be viewed and edited by anyone with the URL. Following a $14.3B investment from Meta, Scale AI said that it takes data security seriously (LOL), is conducting a “thorough investigation,” and has disabled public sharing from its systems.

10. Seed rounds, IPOs, & acquisitions

The FTC approved Omnicom’s $13.5B acquisition of Interpublic Group with a condition barring the merged company from steering ad dollars away from platforms based on “political or ideological viewpoints” unless requested by advertisers. The order would prevent Omnicom from avoiding platforms like X based on their political viewpoints without explicit directions from its advertiser customers. The agency emphasized the decree preserves advertisers’ rights while curbing agency-level bias in ad spend decisions.

GoKwik, an Indian e-commerce enablement platform that helps online retailers improve checkout conversions and reduce returns, raised $13M in round led by RTP Global, bringing its total amount raised to $68M since its inception in 2020. The company will use the funds to accelerate international expansion and fast-track R&D across its AI commerce stack, as the company pivots towards offering hyper-personalized, data-driven experiences.

Botpress, a Canadian platform that lets developers build, test, and manage AI agents, raised $25M in a Series B round led by Framework Ventures. The company will use the funds to double its 65-person workforce over the next year, as well as hire a team to build agents for internal use to help the company learn how customers use its technology.

Domaine Worldwide, a NYC-based Shopify agency that developers e-commerce experiences for premium and luxury brands, acquired Code, a Netherlands-based Shopify agency specializing in custom Shopify Plus solutions, for an undisclosed amount. The acquisition expands Domaine's international footprint with a new European hub and unites Code's 60-person team to create a global development practice comprised of over 300 commerce experts.

Dotdigital, a London-based customer experience and data platform, acquired Social Snowball, a New York-based influencer, affiliate, and referral marketing platform, for $35M. The deal integrates creator-driven performance marketing into Dotdigital’s CX platform, allowing brands to activate word-of-mouth campaigns tied to customer data, and strengthens the company's position in the Shopify ecosystem.

WPFactory, a developer of WooCommerce and WordPress plugins, acquired WooBeWoo, a developer of WooCommerce plugins that offer product display and filtering tools, for an undisclosed amount. The acquisition follows its recent purchase of Extend-WP and furthers WPFactory's goal to be a one stop solution for WooCommerce store owners.

Polymarket, a decentralized prediction market platform where users can trade on the outcome of real-world events using cryptocurrency, is nearing a deal to raise more than $200M in a funding round led by Peter Thiel’s Founders Fund that will value the company at over $1B. The company previously banned U.S.-based users under a 2022 regulatory settlement, but intends to return to the U.S. in the future, as well as issue its own crypto token. Last month, Polymarket entered a partnership with X to be its official prediction market partner.

Xero, a New Zealand cloud-based accounting platform that helps small businesses manage finances, invoicing, payroll, and payments, is acquiring Melio, a SMB bill pay platform, for $2.5B to strengthen its U.S. presence and integrate payments with accounting for small businesses. The deal targets a $29B addressable market and aims to streamline AP processes that still rely heavily on manual methods. Xero says combining forces with Melio will help millions of U.S. SMBs manage cash flow more efficiently on a single platform.

Meesho, a Bengaluru-based e-commerce marketplace, is set to launch its IPO with plans to raise Rs 4,250 crore ($500M) through a fresh issue of equity shares. The company recently shifted its domicile from the U.S. to India and plans to file the for the IPO with the securities and exchange board of India. Shareholders have also approved the appointment of founder Vidit Aatrey as chairman, managing director, and CEO.

Meta is currently in acquisition talks with PlayAI, a Palo Alto-based startup that provides users with an AI voice cloning tool, according to Bloomberg sources. Meta is looking to buy the startup's technology as well as absorb some of its employees into the company, however, the parties haven't yet come to an agreement. I'd imagine PlayAI is in a good position with all the talks of Meta overpaying for AI talent in recent weeks!

Shein is planning to file a confidential draft prospectus for a Hong Kong IPO as early as this week, marking a its third attempt at going public after failing to secure regulatory approval in the U.S. and U.K. The listing would require approval from both the Hong Kong exchange and China’s securities regulator, with Shein hoping to boost the city’s IPO activity and regain momentum after a $66B valuation drop.

Novoloop, a California-based chemical recycling company that transforms hard-to-recycle plastics like polyethylene into materials that other companies actually want to buy and manufacture with, raised $21M in a Series B round led by Taranis, bringing its total amount raised to $42M. The company recently completed a test run of its demonstration plant, which continuously upcycles waste plastic that can be used to make everything from sneakers to car seats, and says that it currently sells out of everything it produces. It'll use the funds to finalize the design of its first commercial-scale plant and begin construction.

Shadowfax, an Indian logistics startup that provides last-mile delivery services for e-commerce, food, pharma, and retail, is planning to submit draft papers for its IPO to the Securities and Exchange Board of India within a month, hoping to raise up to Rs 2,500 crore ($300k) through the offering. The company hopes to use the funds it raises to expand its quick delivery offerings, which currently makes up about 30% of its revenue.

Capchase, a vendor financing platform for B2B software and hardware companies, acquired Vartana, competing vendor financing platform, for an undisclosed amount. The combined company will offer digitized vendor financing workflows for B2B buyers that is integrated directly in their purchase flow, while providing more flexible tech-enabled financing options.

ShopOS, an Indian AI-native operating system that provides infrastructure and tools for building and scaling online shopping experiences, raised $20M from Flipkart co-founder Binny Bansal through his venture fund 3STATE Ventures. The funds will be used to scale its product and engineering teams and onboard global brands.

Crisp, a collaborative commerce platform that connects retailers and suppliers through real-time data sharing to optimize supply chain decisions, acquired Cantactix, a retail space planning and category management software provider, for an undisclosed amount. The deal follows Crisp's recent acquisitions of Shelf Engine, SKUTrak, ClearBox Analytics, Atlas, and Lumidata, and SetSight, positioning itself to provide CPG brands with visibility into data and insights to optimize their supply chain operations across major retail channels.

GrubMarket, a food tech company that sources and delivers fresh farm produce and groceries, acquired Coast Citrus Distributors, a produce distribution company that supplies fresh fruits and vegetables to retailers and foodservice providers, for an undisclosed amount. The acquisition is GrubMarket's largest to date and enhances its national produce distribution capabilities.