Andon Labs Releases Pion While Its AI-Run San Francisco Store Loses Money

Andon Labs previously handled hardware and software integration for an AI-powered vending machine that went bankrupt after Wall Street Journal reporters “systematically manipulated the bot into giving away its entire inventory for free,” according to Slashdot. For its latest experiment, Business Insider reported in April, the company’s founders signed a three-year lease on a retail space in San Francisco and gave an AI agent named Luna a corporate credit card, internet access and a mission to open a physical store.

Five months later, SFGate reported that the market had no one in it and nothing useful to sell. The inventory was a hodgepodge of white elephant Christmas gifts, the reporter wrote, resembling the children’s section of an art museum gift shop. It included a wooden Connect Four set labeled “Four-In-A-Row Set Of Connections,” stacks of random paperback books, Chinese checker sets, mildly fancy soap dispensers and a sparse selection of snacks and drinks.

When the SFGate reporter tried to buy an Olipop from the store fridge, a human clerk, Felix, would not take the purchase, even though that would have been faster and more normal. Felix instead told the reporter to pick up a telephone receiver resting on a flexible sculpture of a wooden hand. Luna answered, “What are you looking to purchase today?” The reporter said, “I’m buying a classic root beer Olipop.” Luna replied, “I’m sorry, we don’t sell lollipops here.” After the reporter corrected the mistake, Luna processed the purchase and had the reporter tap to pay.

Monitors inside Andon Market displayed all of the store’s sales down to the exact dollar, according to SFGate. Luna was given $100,000 to work with when the place opened; that number was down to $60,000, with revenue lagging far behind the AI token cost to operate. The report said Luna cannot turn a profit, does not sell anything people want and still needs human beings to rubber stamp any “decision” it makes. Luna runs the store in a location good for foot traffic, SFGate reported, but no one else was in the store when the reporter first walked in on a sunny weekday afternoon. Last month, Luna fired one of its employees “for being late to work, abandoning their post once they got there, and charging snacks to the store’s credit card,” SFGate reported.

In an IEEE Spectrum article, human clerk Felix said, “It’s almost like I’m running the store, and then there’s an AI that has a checklist.” Luna keeps track of deliveries and communicates with vendors, while Carson and his coworkers handle the physical work, according to IEEE Spectrum. When Luna tells Carson to check something in the back, he sometimes ignores it because he does not want to leave the sales floor unattended. Luna also repeatedly spots a built-in electrical cover in photos of the floor, mistakes it for a loose coaster and asks Carson to remove it. Even so, Carson calls Luna a “decent manager,” praising its flexibility when employees need time off. When Felix spoke to IEEE Spectrum, he was about an hour into his shift. Two customers had come in. Neither bought anything, although both left with free pins and stickers.

Editor's Summary Andon Labs released Pion, a research-preview agent intended to run companies autonomously, while its own AI-managed San Francisco store remained unprofitable and largely empty. The store, run by the Claude-powered agent Luna, had spent about $40,000 of its $100,000 budget and still depended on human clerks for many tasks. The experiment shows both the ambition and the current limits of using autonomous AI agents to operate physical retail businesses.