Shopify CEO Tobi Lütke tells employees to prove AI can’t do the job before asking for resources

Shopify
The e-commerce giant expects AI to be used in prototyping, and adds AI evaluation to performance review.

CEO Tobi Lütke told Shopify employees that using artificial intelligence (AI) is now “a baseline expectation,” and that they’ll have to demonstrate AI can’t help them before asking for more resources or staff. 

In the March 20 memo, which Lütke shared in an X post because he claimed it was in the process of being leaked, the leader of the Canadian e-commerce giant told employees that “Using AI effectively is now a fundamental expectation of everyone at Shopify,” and that it’s a tool of all trades that will only grow in importance. 

Shopify will be adding AI usage questions to its performance and peer review questionnaires

“Frankly, I don’t think it’s feasible to opt out of learning the skill of applying AI in your craft; you are welcome to try, but I want to be honest I cannot see this working out today, and definitely not tomorrow,” the memo reads. “Stagnation is almost certain, and stagnation is slow-motion failure.”

As part of the new employee policy, Shopify laid out new expectations for the prototype phase for what it calls a “GSD project.” GSD is company lingo for its internal task tracking system, nicknamed “Get Shit Done.” The company said prototyping should be “dominated” by AI exploration, and that it will be adding AI usage questions to its performance and peer review questionnaires. The memo adds that “Teams must demonstrate why they cannot get what they want done using AI” before asking for more headcount and resources. 

In the memo, Lütke said he had previously called on his employees to “tinker” with AI in order to dispel skepticism or confusion that AI mattered at all levels, but added that the call was “too much of a suggestion,” rather than a requirement, which he was looking to change with the memo. He claimed, without citing specifics,  that some of his colleagues are contributing “10X of what was previously thought possible.” 

Research on the impact of AI implementation on worker productivity is mixed, with the greatest benefits evident when AI tools are added to the workflow of less skilled workers. For example, a 2023 NBER study of customer support agents found access to AI tools increased productivity by 14 percent on average and 34 percent for novice and low-skilled workers, but provided no appreciable benefit to more skilled and experienced workers.

“In a company growing 20-40% year over year, you must improve by at least that every year,” Lütke said. “This goes for me as well as everyone else.”

Shopify’s revenue was up 31 percent year over year in the last quarter of 2024. 

RELATED: Shopify, Lightspeed among Canadian tech stocks dragged down in US tariff-spurred market plunge

Lütke has become more outspoken about his optimism around AI in recent months as Shopify has been building up its AI toolbox. Lütke recently shared infographics and product photos he claimed were generated with ChatGPT, saying in an X post that great AI prompts can improve “tired” product photography. 

Last month, Shopify acquired AI-powered retailer search startup Vantage Discovery for an undisclosed amount. A Shopify spokesperson told BetaKit that the search platform and team will play a key role in “supercharging” Shopify’s work for both merchants and buyers, and CTO Mikhail Parakhin signalled that the acquisition could be used to help with advertising. Parakhin is an ex-Microsoft AI leader, which Shopify called “one of the finest machine learning crafters on the planet” when they added him to the C-suite in August 2024. Shopify also recently released a feature that allows merchants to prompt AI to design a store theme. 

Following Lütke’s memo reveal, Shopify made up some lost ground in the stock market. The company’s share price on the Nasdaq stock exchange had been dragged down nearly 25 percent in the United States tariff-spurred market plunge last week, but has bounced up just over two percent as of 3:30 p.m. on Monday. 

Disclosure: BetaKit majority owner Good Future is the family office of two former Shopify leaders, Arati Sharma and Satish Kanwar.

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