QXO Inc., a digital technology and services company out to modernize the $800 billion building products distribution industry, took a major step today by announcing the appointment of its first chief AI officer, who will lead QXO’s development of AI-powered applications.

Ashwin Rao, chief AI officer, QXO Inc.

Ashwin Rao — a former Target Corp. vice president of AI who is also a Stanford University adjunct professor of applied mathematics focused on AI technology — will lead a team of AI experts developing AI-powered ways to improve distribution operations like supply chains, warehouse automation and routing delivery trucks.

QXO eyes dozens of AI projects

“The opportunities to use AI to transform the building products distribution industry are endless,” Rao says. “I’m excited to get started on dozens of AI workstreams that, combined with advantages of scale, will help QXO increase efficiency, optimize supply chains, and add value for our customers.”

On his LinkedIn page, Rao adds that he’ll work at QXO to “get building materials to the right places at the right time in the right quantities, by blending AI with deep domain-specific knowledge.”

Brad Jacobs, QXO’s chairman and CEO, said, “Artificial intelligence will permeate everything we do at QXO, including demand forecasting, inventory management and ecommerce.”

QXO builds a team of data scientists

Jacobs added, “Ashwin is recognized as one of the brightest minds in enterprise AI. He will be instrumental in making QXO the most tech-forward company in the industry.”

A QXO spokesman says Rao will build a team of about two dozen data scientists in Palo Alto, California, to build the company’s AI function. He added that the work Rao’s team does “will span the entire company, from route optimization in transportation, to robotics and automation in the warehouses to supply chain optimization.”

“Contractors and home builders we’ve surveyed say the most important thing for them is to get their orders in full, on time and intact,” the spokesman adds. “Ashwin and his team will use AI-based inventory management systems to meet that standard.”

QXO adds to Rao’s AI experience at Target

The spokesman notes that, at Target, where Rao headed AI efforts between 2016 and 2022, Rao led the initiative to develop the retail chain’s entire AI function and “build AI into Target’s core retail business, overhauling the product recommendation engine, which generated billions of dollars for the company.” He adds that Rao’s AI work also helped to rebuild Target’s supply chain.

Following Target, Rao founded and served as chief technology officer of CX Score, an enterprise AI firm that developed applications for optimizing marketing campaigns. He joined QXO from CX Score.

Rao began his business career as a Wall Street derivatives trading quant or pricing strategist at Goldman Sachs, followed by a position as managing director of market modeling at Morgan Stanley. He holds a doctorate in theoretical computer science from the University of Southern California and a bachelor’s degree in computer science from the Indian Institute of Technology Bombay in Mumbai, India.

QXO, based in Greenwich, Connecticut, notes that the building products industry is “highly fragmented” with approximately 7,000 distributors in North America and 13,000 in Europe and primed for modernization.

“QXO is going to be a tech-forward company, but we’ve raised $5 billion to make acquisitions of building materials distributors,” the spokesman says, adding, “We’re planning on building the company through mergers and acquisitions to $50 billion in revenue over the next decade.”

“The building products distribution industry’s nascent use of technology, particularly AI and B2B ecommerce, represents a compelling opportunity for QXO as a tech-focused entrant,” QXO says on its website. “QXO’s combination of scale and innovation should elevate the customer experience, increase salesforce effectiveness and enable margin expansion.”

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. [email protected].

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