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Enterprise applications could include bolstering the conversational abilities of customer service chatbots. The model鈥檚 emotional depth could appeal to the 24% of consumers who use generative AI (genAI) for companionship, per Cisco Systems. Will OpenAI pull back? Considering its enormous computing needs, GPT-4.5 may never become available for free users.

Behind the numbers: While the number of buyers using chatbots as shopping assistants remains modest at best, usage of genAI tools is rising鈥攅ven if shoppers aren鈥檛 always aware of them.

Gartner forecasts that traditional search engine volume will drop 25% this year, with market share shifting to chatbots and agents. Younger users are more inclined to use AI tools for search. Nearly 1 in 5 (17.5%) of Gen Zers prefer AI tools over Google, per Pearl, compared with 10.2% of millennials and 8.5% of Gen Xers. Copilot reviews are mostly negative.

Year of the chatbot: Google鈥檚 Apprentice Bard is among many chatbots we鈥檒l see released by the tech industry this year. Investors are excited, but performance and monetization are market hurdles.

Chatbots are AGI stepping stones: DeepMind might release a ChatGPT competitor called Sparrow sometime in 2023. Chatbots are part of a much bolder vision to alter society with artificial general intelligence.

A chatbot-induced suicide could get regulators' attention: AI鈥檚 Eliza effect is triggering mental health issues. Companies will struggle to balance entertainment value with safety amid the AI arms race.

Last week, Arc, a web browser from startup The Browser Company, released a new AI-powered feature called pinch-to-summarize, which provides an instant summary of full web pages. That follows Arc鈥檚 release of 鈥淎rc Search,鈥� a mobile app that will search the internet based on a user鈥檚 query and deliver an AI-generated page summarizing the breadth of information it searched. It鈥檚 not the only AI tool targeting search. Perplexity is seeing increased attention for its ability to summarize data sets, including searching in Reddit posts or YouTube videos. This month also saw the rebranding of Google鈥檚 Bard chatbot to Gemini as the company doubles down on AI search.

Baidu is planning to release an update to its ChatGPT-like chatbot, Ernie, in June. The golden age of AI: OpenAI CEO Sam Altman noted AI model costs drop tenfold annually, boosting accessibility and usage, as seen with companies like DeepSeek, per Business Insider.

Customer service issues: Many reviews highlight frustrating experiences with RBS鈥檚 customer support, including difficulty speaking to human representatives, unhelpful chatbot responses, and poor fraud resolution. Account issues: Several customers report missing funds, blocked transactions, and a lack of flexibility in resolving financial disputes.

The company recently partnered with Salesforce to better connect its Gemini chatbot with Slack and Agentforce to attract business users. Why it鈥檚 worth watching: Various companies have competing AI video-generation tools geared to help businesses cut back on production costs while increasing their reliance on text-to-video AI services.

The potential liability that AI companies face is hazy: The legal system hasn鈥檛 caught up to AI, leaving ambiguity over what kinds of AI responses could be grounds for legal action鈥攍ike whether offputting chatbot outputs are illegal or just disturbing. Preferred engine: Despite AI鈥檚 growing intelligence, consumers are still more comfortable with traditional search engines.

GenAI chatbot use is on the rise. 鈥淕enAI shopping assistants and chatbots are going to play a much larger role in holiday sales this year,鈥� predicted our analyst Rachel Wolff. AI use will happen whether consumers know it or not. Some 99% of US adults have recently used at least one common AI-enabled product, per Gallup and Telescope. But 64% didn鈥檛 realize they were using AI.

Google鈥檚 Gemini chatbot went off script by generating threatening responses to a graduate student who was prompting it to answer essay and test questions. Meta walking back content moderation and fact-checking makes it difficult to regulate misinformation on its various platforms.

Zooming out: BuzzFeed鈥檚 shift away from publishing and toward digital assets is partly due to users鈥� higher engagement with interactive items鈥攍ike games and chatbots鈥攃ompared with articles. But that transition has been rocky.

Meta鈥檚 multiyear partnership with Reuters gives its AI chatbots access to Reuters鈥� news content, a mutually beneficial arrangement. OpenAI signed deals with the Financial Times, Axel Springer (our parent company), The Associated Press, and Dotdash Meredith.

Zooming out: Snap has experimented with AI to bolster its Snapchat+ offerings, such as the ChatGPT-powered My AI chatbot. My AI was originally released to Snapchat+ subscribers only before becoming available to the public a few months later, a strategy that Snap may repeat with the new genAI tool.

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.

The company is reportedly building an AI-driven search engine, which would provide answers to questions on its AI chatbot, Meta AI. In December 2024, Meta said Meta AI had surpassed 600 million monthly users worldwide. Amazon is working to safeguard its position as the top product search platform.

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.

蘑菇AV one-fourth (22%) of teens have shared content online that they later realized was fake, per Common Sense Media, and 28% have wondered whether they were talking to a human or an AI chatbot online. Meeting standards: GenAI is becoming more common in classrooms, but 39% of teens who鈥檝e used it for schoolwork report inaccuracies with the output.

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.

Unlike basic chatbots that require step-by-step prompting, these agents can understand broader goals and autonomously determine how to achieve them. The tech giant battle for AI agent supremacy has begun. Major tech companies are rapidly commercializing AI agents:. OpenAI is preparing to launch Operator in January 2025. Microsoft has begun integrating agents into Copilot Studio.

AI chatbots and predictive analytics are enhancing customer service, allowing insurers to better allocate resources and personalize interactions. What to watch for: There鈥檚 another potential challenge that could offset some of these operational gains鈥擳rump鈥檚 proposed tariffs.