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Trendspotting: Chinese AI advances are accelerating after DeepSeek launched the competitive R1 chatbot and the powerful image generator Janus Pro. Tech giants like Google, Meta, and Microsoft are investing in AI video generation, but ByteDance's innovation could give TikTok an advantage in synthetic media.

GenAI-powered chatbots drove shoppers to spend. Consumers鈥� use of genAI-powered features grew 6% week over week on Black Friday as shoppers turned to the technology to find products that suited their needs, per Adobe. That assistance delivered clear results: Retailers with genAI integrated into their site and/or app saw a 9% higher conversion rate than other retailers.

AI-powered chatbots are the next frontier. Meta AI鈥檚 prominent position across Meta鈥檚 platforms will galvanize consumer adoption of the tech, further entrenching social search and, eventually, providing another surface for ads. Social networks have expanded search beyond the lower funnel. Social search is here to stay.

Asking chatbots for information on products is far less common. Only 12.6% of consumers engage in that behavior. Key stat: Discounts are the top purchase drivers, with 62.3% of consumers citing them as a key consideration, per 蘑菇AV and impact.com. Both younger (18 to 27) and older (60+) consumers prioritize discounts when shopping.

Companies like Microsoft, Salesforce, and Zendesk are racing to shift from AI chatbots to AI agents that integrate more effectively into business operations. Use case鈥擝aca Systems: Industrial equipment manufacturer Baca Systems uses AI agents to improve response times and customer satisfaction.

Our take: ChatGPT may have defined the genAI chatbot revolution, but it鈥檚 late to the AI agent party. OpenAI鈥檚 challenge lies in demonstrating safe and compelling AI agent use cases. Failure to do so risks falling behind in the increasingly lucrative enterprise AI market.

Another 65% want AI-enabled chatbots to facilitate shopping interactions. Key stat: 30% of consumers in the South regularly eat fast food, compared with 17% in the Midwest, according to data from YouGov. Young men are the most frequent fast-food customers, with 45% of young men in the South eating fast food multiple times per week.

Google鈥檚 Gemini generative AI (genAI) chatbot faced similar public fallout in November for going rogue. In June, Microsoft paused Copilot鈥檚 Recall feature due to privacy concerns. Apple plans to display future alerts in italics while highlighting that these beta features can result in potential errors. Those changes may not be sufficient in the face of continuing backlash.

Google has used 鈥渟ome portion鈥� of YouTube鈥檚 library to train its Gemini chatbot through individual contracts. Both companies are owned by Alphabet. Shrinking pool: AI models may soon face scaling challenges due to the dwindling pool of high-quality data available for training. That could slow down timelines for model improvement in the future.

Chatbots can personalize the purchase journey. Over half (52%) of retailers were considering investing in genAI for a branded virtual shopping assistant as of September 2023, per Nvidia. How ads will factor into conversational search through chatbots is still up in the air. But eventually, chatbots could promote retail media search鈥檚 role in product discovery.

This is likely to be driven by Gen Zers, who are more open to using genAI-based chatbots to find friendship and companionship, according to a recent survey by social network Soul. Tech giants ByteDance, Baidu, and Tencent have all launched AI chatbots to capitalize on this trend.

Many companies slimmed down operations by automating some customer service functions with chatbots. Regional banks鈥� choice: While lowered interest rates may provide some relief, some regional banks have already chosen to extend their CRE loans, per The Federal Reserve Bank of New York.

Meta: AI ad models enhanced revenues per user, and the Meta AI chatbot attracted more than 500 million users. Rising capital expenses for data centers and AI chips underscore Meta鈥檚 commitment to sustaining AI-driven engagement across social media and wearables. Infrastructure investments and demand risks. Amazon: Generative AI (genAI) demand helped drive 48.6% YoY growth in AWS鈥檚 operating income.

A step up: The tool鈥檚 release follows tech鈥檚 shifting focus from generative AI (genAI) chatbots toward fully autonomous bots that can act on users鈥� behalf. Anthropic launched CUA capabilities for its Claude 3.5 model in October. Microsoft and Salesforce are producing enterprise AI agents that can automate sales, operations, and customer service.

PenFed Credit Union cut resolution times and increased chatbot activity by 223% using AI agents. HR company Adecco used Salesforce鈥檚 Agentforce to integrate MuleSoft and Data Cloud to unify data from more than 40 systems. This enabled recruiters to place jobs faster, personalize service at scale, and improve efficiency.

The AP will give Google a 鈥渇eed of real-time information鈥� to improve its Gemini chatbot and keep its outputs up to date. Google didn鈥檛 specify how much the deal is worth, whether it will attribute content to the AP, or if it will provide links back to original articles.

Meta AI is a chatbot, not a search engine, but it does integrate results from Google and Bing. Although some users have expressed annoyance at the change, its prominent placement in established apps could help promote acceptance of genAI in search.

Comprehensive business transformation: Instead of implementing isolated AI tools like standalone chatbots, FIs should aim to reengineer entire processes or customer journeys. Their tools should be capable of working together to handle more complex tasks. Strong governance and cross-functional teams: FIs must create centralized control over AI implementation, ensuring proper risk management.

As AI advances from simple chatbots to mission-critical tools like AI agents, businesses and investors are showing renewed optimism鈥攖hough their confidence may outpace the technology鈥檚 current capabilities. AI hype versus ROI: Salesforce鈥檚 AI agents have received strong initial feedback鈥攖he company鈥檚 150,000-firm client list is a captive market for running AI tools and automations at scale.

Respondents overwhelmingly express that they do not want AI or chatbots to replace information directly received from nurses and doctors. The final word: Lavidge鈥檚 survey found that only about 1 in 4 patients have a categorically positive healthcare experience. And their chief frustrations come from their belief that healthcare is too complex, expensive, and impersonal.

Users that join conversations can get the AI hosts to elaborate on certain topics, similar to using specific prompts to zero in on desired AI chatbot answers. The tool can generate engaging 5- to 10-minute podcasts from documents鈥攃reating easily shareable content without the need for podcast voice talents, scriptwriters, or a production team.

These bespoke advanced AI systems will offer personalized experiences that feel more like interacting with a knowledgeable brand representative than a standard chatbot. The trend could be encouraged by the 77% of consumers in the US and Europe who say they鈥檙e either very or fairly comfortable with AI being used to make chatbots more helpful, per an Adobe and Econsultancy survey.

This is expected to accelerate OpenAI鈥檚 diversification beyond AI chatbots into agents, search, education, and devices. Outlook for 2025: OpenAI鈥檚 evolution from a nonprofit to a Big Tech player has opened doors for innovation and profitability, but it has also heightened pressure to demonstrate profit.

Consumers with bundled services might be looking to downgrade or modify, rather than cancel outright, and speaking to an agent or chatbot is the best approach, the industry groups stated. Cancellations over the phone usually require identity verification, which could help avoid malicious disabling of alarm monitoring services or other security-related subscriptions.