Scaling AI at Union Pacific starts with people

As AI moves from experimentation to scale, many organizations are discovering a hard truth. Despite heavy investment in technology and models, impact often falls short of expectations and the constraint isn’t the technology itself but the operating model, culture, and the workforce required to turn potential into performance.

It takes a certain range of skills to articulate that distinction, and Rahul Jalali, CIO of Union Pacific Railroad, is leading tech through the company’s next phase of transformation.

After more than two decades at Walmart, where he helped shape technology inside one of the world’s most sophisticated retail platforms, Jalali made a move that surprised some peers by joining a 163-year-old railroad, founded by Abraham Lincoln in 1862.

“I’ve been lucky to work at two iconic companies that have stayed relevant as times and demand have changed,” he says. “The fundamentals of true digital transformation transfer across industries.”

Five years into his tenure at Union Pacific, and with a potential merger with Norfolk Southern on the horizon, his conviction has only strengthened in that sustainable transformation, with or without AI, is powered by people.

Platform thinking in an asset-intensive world

Retail and railroading may appear worlds apart. One moves merchandise from shelf to shopper while the other moves freight across thousands of miles of track to distribution centers. But Jalali sees common principles. “When people ask about the shift from retail to transportation, I go back to fundamentals,” he says. “The most successful companies think like platform companies. They create a set of products that work together to drive customer centricity.”

At Walmart, platform thinking enabled scale. At Union Pacific, it’s meant first investing in foundations. “We had to get the fundamentals right,” he says. “Create the vision, align the teams to it, build the right platforms and capabilities, and then watch the magic happen.” That foundation now underpins customer transparency, operational efficiency, and data-driven decision making. It also provides confidence as Union Pacific prepares for the possible Norfolk Southern merger, which would create the first unified, single-service transcontinental railroad in the US.

“We’re at a clear inflection point,” Jalali says. “We’ve had success delivering foundational platforms that position us well for the AI era and for the potential merger. Technology will be at the forefront of integrating the companies and enabling a seamless supply chain network.”

At the center of this strategy is a simple philosophy, that technology must be business and customer led, not technology for its own sake. “Gone are the days of build it and they will come,” he says. “We’re building with our customers and that creates transparency, which then creates stickiness.” He applies the same logic to suppliers. “We tell our partners to build with us, not just for us, so if we thrive, they thrive as well.”

Trust before accountability

For Jalali, platform thinking is necessary but insufficient on its own since culture determines whether transformation sticks. “You can’t build accountability without first building trust,” he says. When he joined Union Pacific during the early months of the pandemic, he began writing transparent weekly memos detailing whom he was meeting and what he was learning. “I started getting unsolicited responses from the team,” he says, adding that many said it ignited new ideas and connection points across the organization.

Those memos turned into structured tech-focused listening sessions across the organization, led by Jalali and his leadership team. The intent was straightforward: explain the why behind decisions and create space for dialogue. “When you explain the why,” he says, “you create relationships and build trust, and that drives accountability.”

The impact has been measurable. Amid significant transformation and a pending merger, Union Pacific’s technology organization recorded one of its highest engagement scores last year. Jalali sees that as more than a morale indicator. “If people feel heard and invested in, they lean into change,” he says. “That always matters, especially in the AI era.”

Merging institutional knowledge with new perspectives

Union Pacific’s workforce spans generations, from employees with decades of railroading experience to early-career technologists who think natively in data, platforms, and AI. Jalali views that intersection as a competitive advantage. “When you merge deep institutional knowledge with new thinking on modern tech platforms, the results are powerful,” he says.

He’s intentionally created cross-functional exposure so technologists understand the operational realities of rail yards and supply chains, while seasoned employees are exposed to new tools and emerging capabilities. “We ask what they want to learn, what tools they need, and what knowledge we can expose them to,” he says.

For Jalali personally, stepping into the complex world of railroading at the beginning required a deliberate reset. After so many years in retail, he knew credibility would come only through immersion. “If you want to be effective, you have to respect the industry and get into the nitty gritty,” he says. “When I first joined Union Pacific, I told my peers and leaders you’re my teachers and mentors. I needed to deeply understand supply chains and how we operate as a company.” Field visits reinforced that commitment, signaling to his team that technology would be shaped by operations, not layered on top of each other.

Such an approach reflects a broader evolution in the CIO role. “We’re part of the north star decision-making arm of the company, not just managing zeroes and ones,” he adds.

Scaling AI with shared accountability

As AI adoption accelerates, Jalali thinks many organizations are applying it to solve the wrong problem. “The biggest risk is thinking technology by itself creates value,” he says. “Tech is part of the solution, but value comes when business process and people change with it.”

At Union Pacific, that belief translates into structure. AI isn’t owned by IT alone. Jalali pairs tech and business leaders in a two-in-the-box model, with shared accountability for outcomes. “We start with the business problem, not the solution. We insert AI in a meaningful way across our organizations to drive value,” he says.

That discipline keeps the focus on measurable impact. “We start by understanding how product moves from A to B, and then we find ways to optimize,” he says. “From there, teams work to quickly deploy minimally viable solutions and refine them in the field. I want progress over perfection.”

The approach reflects a broader conviction that’s shaped his leadership since leaving retail for railroading in that technology only scales when the people closest to the work own the outcome. “You have to empower the teams that own the results,” he says.

As organizations enter what many are calling the year AI scales, Jalali is less focused on the sophistication of models than on whether leaders are redefining how their companies operate. The differentiator, after all, will be whether AI is treated as a workforce transformation rather than an algorithm or technology deployment.