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Generative artificial intelligence will affect online consumer habits across a wide range of subsectors, including digital advertising, eCommerce, cloud computing, online travel, entertainment, education technology and online dating, according to a deep dive by Goldman Sachs.
Initially, large-scale cloud providers might benefit the most from the widespread adoption of AI among consumers.
“Over the next two years, we estimate that capex intensity will rise for the major hyperscalers, AWS (NASDAQ:AMZN), Meta (NASDAQ:META) and Google (NASDAQ:GOOG)(NASDAQ:GOOGL) – total capex to increase from $84B (17% of total revenue) in 2023 to $140B (22% of total revenue) in 2025 as hyperscalers remain opportunistic and look to service customers’ higher performance compute needs,” according to the report “Generative AI Part VI: Examining the Consumer Internet Landscape.”
“The return profile of those investments will take shape over time, but, in our view, Cloud providers are direct near-term beneficiaries of the shift towards AI as they generate revenue on these workloads,” the report said.
Goldman Sachs expects an internet powered by generative AI to change the way consumers interact in a myriad of online environments, especially with the rise of more competent AI assistants.
“Over the long term, we do see the potential for new device form factors (AR/VR glasses and headsets, other wearable devices) and the integration of AI assistants in these devices to complement or replace mobile devices as the primary internet access point for consumers (similar to mobile’s replacement of PCs),” according to Goldman Sachs.
It is also expected to create new monetization models. For example, generative AI tools could expand the potential of the creator economy. Data licensing to build models should also grow, much like the deal between Google and Reddit (RDDT). The offering of premium AI features is another avenue for revenue.
Online shopping patterns will change as well. Browsing and manually scrolling through goods will be largely replaced by AI assistants or algorithms funneling shoppers directly to specific items.
“Suppliers of content, goods, services, etc. may lose their direct relationship with consumers as the discovery process is outsourced to AI,” the report finds.
Several companies have already launched generative AI shopping assistants, such as Amazon’s Rufus, Etsy’s (ETSY) Gift Mode, eBay’s (EBAY) Magical Listings and Instacart’s (CART) Ask Instacart.
Search behaviors will also change with the rise of AI assistants and AI-integrated apps.
“While it’s too early to tell the long-term evolution of search, we see Google as well positioned to capitalize on this early shift to AI given competitive advantages around existing scale of users and publishers, unique data, AI capabilities and infrastructure,” according to the report.
The introduction of AI-assisted tutors is already altering learning platforms such as Chegg (CHGG) and Duolingo (DUOL).
Finally, the report finds online dating apps might also undergo radical transformations from generative AI. Examples include generative AI writing pick-up lines or carrying on conversations, building dating profiles, acting as dating coaches, and even writing break-up texts.