Target rethinks AI access as usage-based pricing raises costs

Target is moving from “using AI to running on AI,” but the retailer’s next question is more basic: which employees should get the pricier tools at all. A shift by vendors from fixed-fee subscriptions to usage-based pricing is forcing the company to look more closely at where AI delivers enough productivity to justify the bill.

Andrea Zimmerman, president of Target in India, said the change in provider pricing is pushing the retailer to reassess deployment and that “change isn’t going to be immediate” and “it is certainly not free.” That calculation marks a new phase in enterprise AI adoption, one in which large employers can no longer treat access as a simple software purchase. If usage rises with every query, workflow or employee seat, even a large retailer has to decide whether AI should stay in the hands of a narrower set of power users or be spread across stores, support functions and corporate teams.

The pressure matters because Target has already built a substantial technology base in India. Target in India, or TII, was established in Bengaluru in 2004 and has operated since 2005. A 2024 report said the unit employed more than 4,500 professionals. Target later described the operation as a 5,000-plus-person center and called India its second headquarters, saying every part of its U.S. business is represented there.

That footprint has made India a key testing ground for the retailer’s AI plans. Target has already rolled out Store Companion, a generative AI chatbot for store employees, as part of a broader effort that coverage in 2024 described as about 20 generative AI use cases. The question now is not whether Target can deploy AI, but how much of that deployment will keep paying back in measurable gains. In retail, that means faster store operations, better employee support and fewer workflow bottlenecks. If those gains do not show up clearly, usage-based pricing can turn an experiment into an expensive operating expense.

The stakes extend beyond one retailer. Target’s reassessment reflects a wider corporate problem across U.S. companies: as AI shifts from novelty to infrastructure, it starts to look less like a one-time software purchase and more like a recurring cost that must compete with labor, logistics and marketing. That financial discipline comes after another round of cost pressure at Target. In October 2025, reports said the company laid off about 150 employees in its India capability center as part of broader corporate cuts of 1,800 roles. The message is clear: AI may still be central to Target’s future, but under usage-based pricing, access will have to earn its keep.