Fidji Simo’s Transition to OpenAI
Fidji Simo, who has served as CEO of Instacart since August 2021, announced her decision to join OpenAI later this year, where she will oversee consumer products. This move follows her successful transformation of Instacart from a pandemic-driven delivery service into a robust retail technology leader with a profitable advertising segment.
Stepping Into a Challenging Role
Upon assuming the CEO role at Instacart, Simo faced what management experts refer to as a “glass cliff,” a concept describing the tendency to place women in leadership positions during turbulent times, thereby increasing the risk of failure. When she took charge, Instacart’s explosive growth during the pandemic had plateaued, valuations were falling, and competition from giants like Amazon, Walmart, DoorDash, and Uber was escalating. Despite these challenges, Simo managed to guide the company back to growth, defying analysts’ expectations of a downturn.
OpenAI’s Strategic Bet
By bringing Simo on board, OpenAI aims to leverage her rich experience in retail media to develop innovative, revenue-generating consumer products. As the CEO of Applications at OpenAI, she will be responsible for one of the three main operational areas: Research, Compute, and Applications. Although Sam Altman will maintain his role as group CEO, Simo will handle the day-to-day operations of consumer-facing products, including ChatGPT, DALL-E, and the GPT Store.
Scaling Instacart’s Advertising Business
Simo’s standout accomplishment at Instacart was her ability to expand the company’s fledgling advertising business into a thriving retail media network. While Instacart had launched its self-service advertising platform in May 2020—prior to Simo’s joining the board in February 2021 and becoming CEO—this platform was still in its nascent stages. Under her leadership, what began as a rudimentary ad offering evolved into a comprehensive retail media network, projected to generate nearly $1 billion in annual revenue by 2024.
Innovation with Carrot Ads
In 2022, Simo introduced Carrot Ads, part of the new Instacart Platform. This module allows retailers to integrate Instacart’s entire retail media stack into their own digital storefronts effortlessly. With a simple activation, grocers like Schnucks or Sprouts can access the same sponsored product and display auctions running in Instacart’s marketplace, supported by a vast pool of CPG (consumer packaged goods) advertisers. This setup not only benefits retailers by allowing them to earn a portion of advertising revenue but also provides brands with streamlined access to a self-service portal and unified reporting features.
Appealing to Mid-Size Grocers
This innovative approach was especially attractive to mid-sized grocers, many of whom lacked the resources to establish an advertising infrastructure internally. April Lane, Chief Merchandising Officer at Thrive Market, commented on their choice of Carrot Ads after evaluating multiple platforms, praising its balance of ad density and user experience (UX).
Carrot Insights and Data Integration
To enhance this advertising platform, Simo launched Carrot Insights, a data dashboard that combines in-app ad performance with sales and inventory data at the store level. This integration provided CPG brands with a comprehensive view of their return on advertising spend while giving grocers evidence that their advertising efforts were not undermining their traditional sales channels.
A Milestone for Instacart’s Revenue
The retail media initiative achieved a significant milestone when Instacart’s advertising and related revenue surpassed a $1 billion annual run-rate in the fourth quarter of 2024, with over 220 retailer banners and more than 7,000 CPG brands utilizing the platform.
Connecting Digital and Physical Shopping
While retail media was fundamental to Simo’s strategy, her broader vision encompassed the integration of digital and physical shopping experiences through innovative technology. In January 2024, she implemented personalized advertisements within Caper smart carts, effectively bringing Instacart’s advanced targeting capabilities into physical grocery aisles and allowing brands to reach customers in real-time, not just through digital devices.
Instacart’s Initial Public Offering
Under Simo’s stewardship, Instacart also made its public debut amidst a challenging tech market. On September 19, 2023, the company’s IPO was priced at $30, raising $660 million and closing up 12% on its first trading day. Although the valuation of around $10 billion was significantly lower than its peak in 2021, it marked the first instance of a profitable online grocery business of its kind.
Strategic Financial Moves
Simo laid the foundation for this financial turnaround immediately upon taking the CEO position. She enacted crucial financial strategies such as freezing headcount, renegotiating cloud service contracts, and pushing through the first-ever disclosures of unit economics to the board of directors. These moves helped set the stage for sustained profitability.
AI Innovation in Grocery Shopping
During her final months at Instacart, Simo initiated developments that may inform her future at OpenAI, particularly regarding the incorporation of generative AI into consumer experiences. On March 18, 2025, she unveiled Smart Shop, a generative AI application capable of analyzing 17 million SKUs and billions of past transactions to provide real-time dietary recommendations and dynamic shopping prompts. This innovation could easily be adapted for applications at OpenAI.
Rapid Product Development at Instacart
Simo also showcased Instacart’s agility in consumer product development. A dedicated team developed Fizz, a standalone group-ordering application that incorporates payment-splitting and event integration features within just six weeks. This rapid development highlighted Instacart’s capacity to innovate while experimenting with social commerce strategies targeted at Gen Z consumers.
Potential Contributions to OpenAI
Simo’s tenure at Instacart offers several capabilities that could significantly influence OpenAI’s product strategy, particularly in commerce-focused applications:
- Retail Media Expertise: With her extensive background in advertising, Simo could establish a privacy-sensitive “AI media network” that includes sponsored responses, shopping-enabled chat functions, and contextual commerce within GPT frameworks.
- Physical-Digital Integration: Drawing from her experience with Caper smart carts and connected retail environments, Simo could guide OpenAI in incorporating vision models into physical devices—ranging from voice-activated kiosks to augmented reality applications and cashier-less checkout systems.
- Operational Discipline: Beyond her retail acumen, Simo’s skills in operational restructuring and cost management could help OpenAI navigate the challenges of balancing rapid growth with profitability, especially amid rising computing costs.
Addressing the Bigger Picture
In her remarks regarding her new position at OpenAI, Simo emphasized the transformative possibilities of the role, stating, “Joining OpenAI at this critical moment is an incredible privilege and responsibility. This organization has the potential to accelerate human capability at an unprecedented pace, and I am deeply committed to steering these applications toward the public good.”
This vision resonates with her accomplishments at Instacart, where her focus was consistently on developing technology that enhanced retailer operations and enriched consumer experiences. Her extensive background in Facebook’s advertising ecosystem, combined with her groundbreaking work in retail media at Instacart, positions her uniquely to explore how AI can revolutionize the commerce landscape.
The Future of AI-Assisted Commerce
AI shopping assistants stand as the next frontier in enhancing the consumer shopping experience, guiding users from the research phase through advertising, purchasing, and even repurchasing. Simo’s transition to OpenAI could significantly expedite this evolution, integrating structured product data, monetization strategies, and personalized capabilities into conversational AI platforms.
As retail media networks continue to proliferate across the industry, Simo’s expertise in building distinguished offerings at Instacart may empower OpenAI to carve out unique propositions within an increasingly competitive landscape. Her profound understanding of both commercial principles and advanced technology presents an opportunity to bridge these domains effectively at OpenAI.