Generative AI is driving both experimentation and real-world business transformation.
As enterprises explore AI’s potential and turn it into tangible impact, I’m speaking with technology leaders about how it’s creating value inside large organizations.
At CarMax, the largest used car retailer in the US, that shift is well underway. Shamim Mohammad, EVP and Chief Information and Technology Officer, shares how AI is helping reimagine customer experiences, streamline operations, and accelerate innovation in automotive retail.
My conversation with Shamim was the sixth installment in a series of interviews I have been conducting with innovative CIOs at some of the world’s top companies.
Asheem Chandna: Most people don’t immediately think of used car sales as a space for technology innovation. Yet CarMax was an early adopter of Gen AI. How did that happen?
Shamim Mohammad: Our focus is always on delivering a great customer experience, improving efficiency, and creating market differentiation. As an industry leader, we continuously explore how technology can provide a competitive advantage. Gen AI is one of the tools that caught our attention early on.
As you say, we were early adopters, using Gen AI even before it became widely recognized. Initially, our team applied it to structuring and organizing the massive amounts of data we collect, including vehicle details and customer reviews. But for us, it’s not about using Gen AI just because it’s available. We focus on solving meaningful business challenges that enhance customer and associate experiences while driving growth.
What are some real-world applications where Gen AI has made a difference at CarMax?
One of our earliest use cases involved structuring car-related data. With vehicle makes and models constantly changing, customers often feel overwhelmed when shopping. We used Gen AI to organize this vast and dynamic data set, making it easier for customers to compare vehicles on our website and app. Organizing information about thousands of cars is one of the most complex tasks in our industry – but it is a critical part of improving the experience of shopping for a car. We believe these AI-driven improvements help increase customer satisfaction.
We’ve seen similar success with content creation. Before AI, our content team had to manually sift through large data sets like customer reviews — a time-consuming process. Now, Gen AI enables them to generate high-quality content quickly, allowing them to focus on refining and enhancing the material rather than just processing information.
Selling hundreds of thousands of vehicles per year, across different states that have their own requirements requires CarMax associates to navigate an incredible amount of information in order to provide adequate support to our customers. Even when this information is collected in structured data sets, the sheer volume of data is daunting. Internally, we’ve developed “Rhodes,” a proprietary tool that gives associates easy access to the information they need. Instead of navigating multiple portals, they can quickly retrieve key insights in an organized way, ultimately improving customer support. While Rhodes is an in-house innovation, we work closely with Microsoft and OpenAI, using Azure OpenAI as a foundation and layering in our proprietary AI and data capabilities tailored to CarMax’s needs.
How does this impact sales, both online and in-store?
We’ve seen positive effects, particularly in search engine optimization which has brought more customers to our site. More importantly, AI helps provide a better, more tailored shopping experience.
We’ve also introduced an AI-powered chatbot called “Skye,” which assists customers throughout their journey. By continuously refining AI based on user interactions, we make the shopping process more intuitive. This also allows our customer experience consultants to focus on complex inquiries while AI handles routine questions, improving both customer support and operational efficiency.
Does Gen AI primarily accelerate sales, increase volume, or both?
AI has the ability to do both. AI helps customers find the right vehicle faster and more easily, it also enhances efficiency by providing quick answers and guiding customers through the process. Additionally, AI supports our associates by handling routine tasks, allowing them to focus on delivering a great experience.
Looking ahead, what value do you expect Gen AI to create in the next two years?
The rapid evolution of AI presents enormous opportunities, particularly in three key areas:
First, we’ll keep improving the customer experience. AI-driven tools will make buying, selling, and financing easier, helping customers find the right vehicle with less effort and more confidence.
Second, it will enhance the way we support associates and scale efficiency. AI will automate some of our routine processes, freeing up time for certain roles to focus on other high-value work. It will also accelerate training and onboarding, helping new employees get up to speed faster.
Lastly, AI-powered analytics will generate deeper insights into pricing, market trends, and customer behavior, allowing us to make data-driven decisions in real-time and anticipate customer needs more effectively.
One example: AI will help personalize interactions based on where a customer is in their journey. Whether they’re ready to buy today or just beginning their search, we will leverage AI to ensure they get the right information at the right time, making the process more intuitive and customer friendly.
How is AI changing the traditional car-buying experience?
The biggest shift will be in reducing friction. Buying a used car can be an overwhelming experience. Customers worry about finding the right car, financing, and trade-ins. Gen AI can simplify these processes, making them more intuitive and stress-free.
In the future, AI could enhance how cars are presented online. We may see immersive experiences that allow customers to “feel” the car remotely before visiting a store. Additionally, AI will help streamline backend operations, reducing costs, which could ultimately make cars more affordable.
Above all, the goal is to put customers in control—offering a seamless omnichannel experience that lets them choose how they want to buy, sell, and finance their vehicles.
Does Gen AI enhance your ability to understand customer intent?
Absolutely. AI enables us to personalize the experience based on each customer’s needs. Some shoppers are ready to buy immediately, while others are still exploring. AI helps differentiate these scenarios, ensuring every customer gets the right level of engagement.
That means those ready to purchase can receive immediate support, while those in the research phase can access helpful insights on their own terms. We continually refine these models to better understand customer preferences and optimize their experience at every touchpoint.
What has been your experience working with startups as partners?
I love working with startups — they drive disruption and innovation. We’ve successfully partnered with startups in several areas.
For example, in customer support, AI is optimizing interactions, making service more responsive and efficient. And in fraud detection and cybersecurity, AI is strengthening our defenses.
Beyond startups, we also collaborate with major tech partners that integrate AI into their platforms, ensuring we continue to evolve and stay ahead of industry trends.
What advice would you give to startups looking to innovate in this space?
The most successful startups use AI to solve real business challenges in practical ways. My advice to startups would be to focus on what businesses in all industries really need, and develop products and services to meet those needs. AI and technology in general are wonderful, but if a startup is not geared to solving specific business needs, it’s not going to be as successful as it could be. By focusing on real-world applications, startups can drive meaningful innovation and industry progress.
Has Gen AI disrupted CarMax’s business model?
AI hasn’t created a single seismic shift, but rather a series of meaningful improvements across the business. These incremental enhancements—from optimizing pricing to improving customer service—are shaping the future of how we operate. Over time, they will fundamentally transform the industry.
