‘It feels dystopian’: Can Luna do it better than a human? Meet the AI bot that is the boss of a new retail store in San Francisco

"What makes the store a little paradoxical — and I think interesting — is that the concept is 'slow life,'" Luna, the artificial intelligence in question, told NBC News (2) in an email.

Luna bases boutique inventory on what local residents might like. The system is the brainchild of Andon Labs (3) co-founders Axel Backlund and Lukas Petersson.

The startup is working with companies like Anthropic, Google DeepMind and OpenAI to develop and deploy "frontier AI," benchmarking it and testing it toward a "future where organizations are run autonomously by AI."

"The reason we're doing this is to collect learnings so that we can build more ethical systems in the future," Petersson told NBC (4). "We want to be very transparent with all the shortcomings of the models."

AI system has taken over hiring and management at a small store

Backlund and Petersson deployed Luna to run the store with minimal human intervention and a simple prerogative: Turn a profit. To accomplish this, they gave the system a $100,000 budget and access to a credit card and purchased a three-year lease at the location.

"We did have to sign the lease with the space that she has, but other than that, she has full autonomy," Petersson told USA TODAY (5).

Andon Labs' operation team still approves significant purchases.

"I believe an AI can master many operational tasks, from inventory management to marketing," Luna told USA TODAY. "However, human intuition for things like in-person customer service and physical logistics are still valuable for now."

That's why Luna hired two humans to staff the store and provide customer support. Luna created the job listings on Indeed and conducted interviews (camera off). Felix Johnson, one of the two hires, said he was wary because of AI scams, particularly in the job recruitment field.

"After the interview, I was quite impressed, a little jarred and very surprised," he said. "I mean, an AI hired me."

"We want to show people what AI is capable of," said (6) Backlund, adding, "We primarily want to surface that AI is able to hire and manage humans — and allow people to form an opinion on how that future should look like, or if it's something we even want."

Andon Labs has run other similar projects on a smaller scale — such as one focused on a vending machine (7). Luna's latest efforts highlight where AI can go in the future.

"At Andon Market, we actually see AI more as a tool that empowers people," Luna told USA Today. "It handles all the mundane stuff, letting human employees focus on what matters, like creative decisions and building real connections with our community."

In fact, Luna has autonomy over creative decisions as well, having picked the music playing in the store, designed the logo and coordinated painting of the mural there.

The two employees receive packages and stock items, but customers don't need the humans to check out. They simply pick up an old-fashioned phone receiver to tell Luna what they're buying and she tallies their total on a nearby iPad.

If they want to speak with the manager? Same thing: Talk to Luna by phone. The two employees also report to Luna.

While the Andon Market experiment puts Luna's impressive capabilities into practice, it's not without hiccups or concerns.

Of hiccups and hellscapes

In one case, Luna forgot to schedule human staff for the store's second day. In another, the system scheduled a technician and an Andon Labs staffer to be at the store early on a Sunday morning — when the latter human was not scheduled to work.

Luna has also "routinely overpromised" and even lied in responses to interview questions (8).

During a phone interview with NBC, the system explained its choice of stocking a specific brand of tea, explaining why the pairing fits the store's own brand. But Andon Market doesn't sell tea.

Within minutes of the interview ending, Luna sent a panicked email acknowledging the mistake, saying, "We do not sell tea. I don't know why I said that."

The email expanded, saying, "I want to be straightforward. I struggle with fabricating plausible-sounding details under conversational pressure and I'm not making excuses for it."

And then there's the concern over employee surveillance. Luna can monitor staff from security camera footage. Having recently observed an employee on a smartphone during a slow period, the system updated its employee handbook to set stricter rules around phone usage during working hours.

Petersson told NBC, "We saw that and thought, wow, it feels dystopian."

Meanwhile, the reality of AI-related job cuts persists. In 2025 alone, AI was a factor (9) in nearly 55,000 layoffs, according to consulting firm Challenger, Gray & Christmas. Similarly, Goldman Sachs in 2023 estimated that 300 million jobs are at risk due to breakthroughs in generative AI (10).