Tesco has announced a three-year partnership with French artificial intelligence startup Mistral AI, signalling a practical shift in how one of the UK’s largest retailers plans to embed AI into its everyday operations.
Rather than unveiling a single headline-grabbing feature, the agreement focuses on building long-term AI capability across the business. Tesco intends to work with Mistral to develop tools that support both internal teams and customer-facing services, with an emphasis on saving staff time, improving workflows, and enhancing the overall shopping experience.
Ruben Lara Hernandez, Tesco’s Data, Analytics & AI Director, described the partnership as a meeting of retail expertise and advanced AI technology. He said the goal is to help colleagues work more efficiently while providing better support for customers, adding that the deal builds on Tesco’s existing use of technology to serve staff, shoppers, and suppliers.
Embedding AI into daily retail work
Tesco’s approach reflects a broader change in how large retailers are using AI. Early experiments often focused on visible customer tools, but many proved difficult to scale. More recent efforts have shifted toward internal systems, where AI can reduce repetitive tasks, support planning, and speed up decision-making.
The supermarket group has already been moving in this direction. Over the past five years, Tesco has doubled the size of its technology team, underlining how central software and data have become to its operations. AI is already used in several areas, combining in-house development with external partnerships.
In online grocery, AI helps optimise delivery routes, increasing the number of available slots for customers. In supply planning, it supports demand forecasting to keep shelves stocked. Through the Clubcard loyalty scheme, AI is used to personalise offers and communications based on shopping habits.
The partnership with Mistral is designed to extend this work, not replace it. One factor behind the collaboration is Mistral’s model deployment approach, which allows AI systems to operate in more controlled environments. For a retailer handling large volumes of customer and operational data, this level of oversight is an important consideration.
Marjorie Janiewicz, Mistral’s Chief Revenue Officer and US General Manager, said the company’s Applied AI team will work closely with Tesco’s internal experts. She highlighted a focus on building AI products that are customisable, controllable, and aimed at improving both internal workflows and customer experience.
A long-term view on AI adoption
The structure of the deal points to a cautious, measured approach. As part of the partnership, Tesco plans to establish an internal AI lab where teams can test and refine tools before rolling them out more widely. For large organisations, this can help prevent AI projects from stalling in isolated pilots.
There is also a strategic element to Tesco’s choice of partner. Mistral AI is currently the only European company developing large language models at a frontier level, and Tesco is the first major UK retailer to form a partnership with the startup as part of its wider technology strategy. Founded in April 2023, Mistral has grown rapidly and already counts firms such as HSBC, AXA, and Stellantis among its customers.
Execution will now be key. Retail data is often spread across regions, systems, and channels, and AI depends on that data being accurate and consistent. Rolling tools out at scale also requires training, oversight, and trust from the employees who use them day to day.
The benefits may not be dramatic overnight. Instead, success is likely to show up gradually, as store teams, planners, and analysts find their work becoming smoother and more efficient.
