Shopify cut Sidekick's cost per conversation 28% via routing and caching
shashib · x · 2026-11-05
On Shopify's Q3 earnings call, CFO Jeff Hoffmeister said merchant conversations with Sidekick rose 14% QoQ while total Sidekick costs fell 18% — about -28% per conversation. Savings came from Shopify's own engineering: routing simple queries to smaller models, training specialized models for narrow tasks, and caching repetitive work, not from foundation-model price cuts. The open question is whether savings get passed to merchants or kept as margin; note subscription gross margin slipped to 79% from 82% a year ago.
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