It’s the biggest trend in the artificial intelligence industry this year…
But for the average consumer, understanding what agentic AI is and how they can use it can be a big question mark.
Despite the simplicity and ease of use, without being a programmer or familiar with agentic AI software services, most people wouldn’t know where to start.
That’s all about to change, and the adoption will be rapid as the way the technology is being implemented won’t require consumers to learn any new skills.
The technology is now being leveraged for commerce, specifically online commerce, and it will transform how we search for products.
It’s also going to become a direct threat to Amazon’s (AMZN) dominance in the industry.
In the U.S. market, somewhere between 55% and 65% of all product searches begin on Amazon. The turning point for Amazon happened between 2015 and 2018 as Amazon overtook Google for product searches.
The catalyst for that was Amazon’s success with the Amazon Prime membership, which topped 100 million subscribers by the spring of 2018.
Amazon’s secret to its success was the annual flat fee for unlimited free shipping throughout the year. And its ability to make that business model work was the result of more than a decade of investing billions of dollars into its logistics and delivery network.
In short, Amazon achieved remarkable scale… the kind that allows it to be even more competitive on pricing. And free shipping removed the friction involved with online purchases (as no one wanted to pay shipping fees).
But using Amazon still requires effort from the consumer.
We have to sift through the search results, and we’re confronted with a barrage of advertisements and sponsored links that are often of no relevance to us.
It’s not perfect, but it is certainly better than what we had before, which was searching on Google for what we were looking for.
Now it’s time for the next generation of product search, and it will be driven by agentic AI technology.
A few days ago, e-commerce giant Shopify (SHOP) – now a $212 billion company – announced a major partnership with OpenAI. To understand the significance of this product integration between the two companies, it’s easiest to just show you:
Shopify Integration with ChatGPT | Source: Shopify
Now, consumers can simply text or speak with ChatGPT and tell it what they’re looking for. ChatGPT uses its intelligence to find the best match for products that we’re looking for and presents them to the consumer. And with the press of a button, or eventually a verbal command, the product will be purchased and shipped wherever we want.
Seamless, timesaving, friction-free commerce.
This is the sort of frictionless, effortless experience we can expect thanks to the integration of agentic AI. We discussed the application to e-commerce at length in a recent issue of The Bleeding Edge – The Frictionless Future of Shopping…
This trend will prove to be far more friction-free than anything we’ve seen before. And it will likely be the “ah-ha” moment for consumers to grok the power of artificial intelligence, specifically agentic AI.
The “ah-ha” moment is when it clicks for people just how incredible artificial intelligence truly is, and how significant an impact it will have on our everyday lives.
And for most, that moment will come when they experience an AI that addresses or solves, with unparalleled ease, some sort of real-world task for them, particularly those that tend to take up a lot of our time.
Something like the hours spent combing the internet for a gift, a product, a service, is reduced to the seconds it takes to put an agentic AI on the task instead.
The integration with Shopify is so significant because of Shopify’s global reach in e-commerce.
Shopify supports millions of merchants in about 175 countries and is now facilitating more than $1 trillion in annual sales.
It has filled a major hole in commerce by enabling smaller companies with no brick-and-mortar stores to grow their business and access consumers through search and social media with easy-to-use, simple checkout.
Consumers love using Shopify because they only have to enter their credit card and address information once. After that, you can purchase what you want with just a click.
And merchants love it because it is simple to use, results in more sales, and it abstracts away the complexity of having to build their own tech stack for commerce.
Still, the Shopify deal is just part of the picture. Its integration with OpenAI’s ChatGPT will certainly make its service even more valuable to its customers (i.e., the merchants). The bigger picture is what OpenAI is now enabling with ChatGPT and its Agentic Commerce Protocol.
OpenAI announced its initial partnerships with Shopify and Etsy (ETSY), which will also benefit from the integration with ChatGPT.
Specifically, OpenAI announced:
The technology is complex, but working with it for merchants is simple thanks to what OpenAI and Stripe developed. Stripe is now a $91.5 billion private company, and one of the most anticipated tech IPOs. My prediction is that it will be one of the biggest IPOs of 2026.
Despite the complexity, what the consumer sees is remarkably simple and easy to use:
ChatGPT Instant Checkout | Source: OpenAI
It’s easy to see how sticky this will be with consumers. And given that as much as 70% of all e-commerce is now transacted on smartphones, shopping and product search are so much better when enabled with agentic AI.
And get this… about 700 million ChatGPT users use it weekly. That’s about 10% of the global population. OpenAI has an extraordinary distribution for a company that only released its first product at the end of 2022. And its motivation is simple…
OpenAI gets a cut of each transaction that takes place using its AI-powered product search and agentic AI. Early rumors were that its cut is around 2%, but I expect the range to be between 1.5–2%.
It’s very clear what is going on right now.
OpenAI Sam Altman is aggressively racing to front-run Elon Musk and his plans to make X the “everything app.” X has been working hard this year to get approvals in all U.S. states for money transmission, as well as make purchases directly with the X app.
There will be more competition. AI-enabled product search is so much more compelling and simple than our manual search efforts using Amazon.
And as consumers are soon able to speak with their personalized AI agents – that remember all of our preferences for what we like to buy and eat – it will get even easier for us to transact and find the things that we want and need, saving a significant amount of time every week.
On January 1 of this year, in The Bleeding Edge – Looking Ahead into 2025, I predicted that the biggest trend in the AI industry in 2025 would be agentic AI.
That has certainly been the case. Almost every software programmer is currently using agentic AI for coding. And most software companies are employing agentic capabilities in their own products to automate routine tasks and processes, making their products more valuable for their customers.
While consumers are just starting to see agentic AI for daily tasks, the utilization is widespread in the world of enterprise software.
Implementation and adoption will happen quickly, both because of the benefits the technology brings as well as how easy it is to deploy.
As for next year, the next big thing in AI, that’s an easy one…
2026 will be the year of AGI.
Jeff
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
