Beauty Giant Coty Taps OpenAI to Power Global Operations Amid Strategic Uncertainty
In a significant push to modernize its operations, global beauty leader Coty Inc. (NYSE: COTY) has announced a partnership with artificial intelligence research leader OpenAI. The collaboration, unveiled on February 2, is designed to embed enterprise-grade AI capabilities throughout Coty's global organizational system, from daily task automation to strategic decision-making support.
Under the agreement, Coty employees will gain secured access to OpenAI's most advanced models. The rollout will begin with a suite of tools focused on improving cross-functional collaboration and streamlining workflows, with plans to scale usage based on evolving business needs. OpenAI will provide comprehensive training, including live sessions and leadership workshops, to foster an AI-augmented culture.
"This isn't just about adopting new technology; it's about fundamentally enhancing how we think, collaborate, and execute," said Jerome Auvinet, Coty's Chief Information, Digital Innovation & Business Services Officer. "Our goal is to build a future-ready workforce where AI acts as a natural extension of our collective expertise."
The AI initiative arrives at a pivotal moment for the beauty conglomerate. On the same day as the partnership announcement, Canaccord Genuity analyst Susan Anderson lowered her price target on Coty from $4 to $3.59, maintaining a Hold rating. Anderson cited a "clouded outlook" due to the pending loss of the lucrative Gucci license, the appointment of a new interim CEO, and potential portfolio divestitures. Coty currently trades at a forward price-to-earnings ratio of 7.07.
Coty, which operates prestigious fragrance lines alongside mass-market consumer beauty brands, is navigating a period of transition. The OpenAI partnership is widely seen as an effort to sharpen operational agility and talent development ahead of these strategic shifts.
Market Voices React
Eleanor Shaw, Tech Analyst at Veridian Insights: "This is a pragmatic move. Embedding AI at an operational level can drive real cost efficiencies and speed, which Coty will need as it manages portfolio changes. The success hinges on adoption, not just access."
Marcus Reed, Portfolio Manager at Grove Capital: "While the OpenAI tie-up is forward-looking, the market is rightly focused on near-term fundamentals. The Gucci license loss is a material headwind. AI tools won't replace that revenue overnight. The lowered price target reflects that reality."
Priya Vaswani, Beauty Industry Consultant: "Finally! The beauty industry runs on data—trends, consumer sentiment, supply chains. If leveraged correctly, this could give Coty a crucial edge in innovation and personalization. It's about time legacy players embraced tech at this level."
David K. Lynch, Editor at 'The Skeptical Investor' Newsletter: "This reeks of distraction. Announcing a flashy AI partnership on the same day a major analyst cuts your price target? It feels like management is trying to dazzle investors with buzzwords while the core business faces serious challenges. Don't be fooled by the shiny AI veneer."