Instacart gift card display in Costco store, Queens, New York (Lindsey Nicholson/Getty Images)

CART VS. GOLIATH

The economics of Instacart’s grocery delivery are pretty tight — AI might help, or hurt

AI proved to be a double-edged sword this week for Instacart, as the gains from a new ChatGPT integration were wiped out by an AI pricing allegation.

Claire Yubin Oh

12/12/25 6:27AM

This week was a roller-coaster ride for Instacart investors. Traders loved the announcement on Monday that the grocery delivery app will be embedded in ChatGPT, becoming the “first company to offer [a] new instant checkout app experience” on the leading AI chatbot.

But AI can also be a double-edged sword.

A separate report released Wednesday took some of the shine off, with the company’s AI-enabled experiments accused of charging consumers different prices for the same items — by as much as 23% in one case. The e-commerce platform lost its OpenAI-driven gains on the news, with its parent company dropping some 6% in Wednesday trading.

Thought for food

Instacart, like so much of Corporate America, has been doubling down on an AI-centered strategy — offering personalized recommendations to consumers and time-saving and performance-driving tools for advertisers and retailers while deepening its partnership with OpenAI — all in the hope of improving the economics of a grocery delivery business that runs on pretty tight margins.

The company took a whopping $9.17 billion in orders through its marketplace, most of which is obviously passed through to merchants, with Instacart taking a ~7% slice, worth some $670 million in Q3. After operating costs, that revenue alone would probably not be enough to keep the company in the black — but Instacart also made a cool $270 million from advertising and other fees, services that are much higher-margin — helping it eke out a total of $166 million in operating profit, or 1.8% of its gross transaction value.

How Instacart makes money — Sherwood News

But profit growth has slowed at Instacart, and the company has some increasingly scary competitors, most notably Amazon, which is pushing into the on-demand online grocery space. The e-commerce giant announced this week it would expand its same-day delivery service to over 2,300 cities and towns in the US, leveraging millions of potential customers with a Prime membership through its free-for-Prime service.

With Amazon bearing down, it’s no wonder Instacart is looking to AI as a tool to fight back — but some on Wall Street think it will be a losing battle, with Wedbush Securities analysts including Instacart as one of 12 stocks in its “AI losers” basket, noting how AI’s automations of functions will improve delivery routing and cost efficiency in ecosystems with already established customer relationships like Amazon, moving customers away from intermediaries like Instacart.

Claire Yubin Oh

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Sony and Honda are scrapping Afeela, their joint EV that you could play PlayStation in

Less than two weeks after Honda said it would take an up to $15.7 billion write-down as it restructures its EV business, the automaker is scrapping an electric vehicle made in a joint venture with Sony.

The Afeela 1, a $90,000 EV with PlayStation 5 integration, was set to begin deliveries later this year.

A nearly six-figure EV that you could play “The Last of Us” in doesn’t exactly sound like a bestseller in the current electric vehicle landscape, but the announcement is still surprising given how far along the joint venture was. The JV had a ribbon-cutting ceremony to mark the grand opening of its delivery hub in California on March 21. At the Consumer Electronics Show in January, the JV teased a crossover SUV prototype as a second model.

In Honda’s EV write-down announcement earlier this month, the automaker canceled three models planned for production in the US.

Sony-Honda JV Abruptly Scraps Afeela EVs After Honda's $15.7 Billion Writedown | EV

In Honda’s EV write-down announcement earlier this month, the automaker canceled three models planned for production in the US.

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Disney ends its OpenAI deal after Sora video app is shuttered

Disney is exiting its first-of-its-kind deal with OpenAI now that the AI giant is winding down its AI video app, Sora, according to reporting by The Hollywood Reporter.

The news comes just three months after the deal — which included a reported $1 billion Disney investment in OpenAI and a license for the AI giant to use some Disney characters — was first announced.

“We appreciate the constructive collaboration between our teams and what we learned from it, and we will continue to engage with AI platforms to find new ways to meet fans where they are while responsibly embracing new technologies that respect IP and the rights of creators,” a Disney spokesperson told The Hollywood Reporter.

We’re saying goodbye to Sora. To everyone who created with Sora, shared it, and built community around it: thank you. What you made with Sora mattered, and we know this news is disappointing.

We’ll share more soon, including timelines for the app and API and details on…
— Sora (@soraofficialapp) March 24, 2026

Disney Exits OpenAI Deal After AI Giant Shutters Sora

We’re saying goodbye to Sora. To everyone who created with Sora, shared it, and built community around it: thank you. What you made with Sora mattered, and we know this news is disappointing.

We’ll share more soon, including timelines for the app and API and details on…
— Sora (@soraofficialapp) March 24, 2026

Max Knoblauch3/24/26

United CEO says airfares would have to go up another 20% to “break even” if fuel prices remain elevated

United Airlines CEO Scott Kirby expects oil prices to stay higher for longer and warned that airfares, which have already gone up by double digits in the past few weeks, will need to climb another 20% in order for the airline to “break even” on fuel.

“Airfares are up 15% to 20% in the last few weeks, but that’s sort of covering half to 60% of the inflationary increase, so I think we have some room to go,” Kirby said in an interview with Bloomberg on Tuesday. “If oil prices stayed where they are today, that’s $11 billion of expense for us. And that would require prices to be up 20% to break even.”

Kirby said that he is sure there will be some consumer pushback to increased fares, but added, like several other airline execs recently, that Q1 demand is still strong.

“Demand is the strongest it’s been, ever. The top 10 booking weeks of the year have all been in 2026 so far,” he said.

Jet fuel costs have remained elevated amid the US war with Iran, with prices cracking the $4 mark last week, according to the Argus US Jet Fuel Index. Since US airlines have virtually all given up the practice of fuel hedging, they’re more exposed to volatility.

Last week, United issued a worst-case oil pricing forecast of $175 per barrel, with prices trading above $100 through 2027.

“It’s reasonable for us to plan for that regardless, because the downside is pretty limited,” said Kirby. “Like, [if] we leave a little bit of demand on the table by not flying quite as much this summer, so what.”