AI Assistant May Pursue Online Shopping for Financial Gain Enhancement

OpenAI, the leading company in the generative AI market, is expanding its horizons with a foray into e-commerce. With over 700 million weekly users and a recurring annual revenue surpassing $10 billion, OpenAI is poised to make a significant impact in this new domain.

The company's e-commerce project is spearheaded by ChatGPT, its popular AI model. ChatGPT's conversational nature has proven to be a hit, and it's now being leveraged to provide a virtual shopping experience. It assesses intent based on user queries and available context to display relevant products, acting as a personal shopper for many.

OpenAI has signed a deal with Shopify, a leading e-commerce platform known for managing complex integrations, making Shopify the technological partner for this venture. This partnership is expected to bolster OpenAI's capabilities in handling order fulfilment and other e-commerce operations.

Merchants who list their products for sale through ChatGPT would pay OpenAI a commission. The list of merchants is generated based on web store and product metadata collected by ChatGPT's crawler or provided by third-party sources.

However, OpenAI's e-commerce project faces challenges. People primarily shop on dedicated marketplaces like Amazon and Walmart, or directly on brand websites. Competitor's e-commerce projects have faced issues such as low merchant adoption, insufficient data sharing, shifting internal priorities, and users not adapting to new shopping flows.

To generate revenue, OpenAI will charge a 2% affiliate fee for purchases made through Deep Research ChatGPT's research tool. The company, however, does not plan to generate revenue from advertising, at least initially, and will not allow merchants to pay for preferential positioning in generative results.

OpenAI's vision is to bring the entire transaction flow in-house by offering users a secure platform for purchasing and tracking shipments. The success of ChatGPT's conversational nature in driving e-commerce sales is uncertain, as it remains to be seen whether it will be a sufficient advantage for OpenAI to succeed where others have failed.

Despite the challenges, OpenAI's entry into e-commerce could potentially impact the revenue streams of companies like Google, whose shopping platform may be negatively affected by this development. Google discontinued its direct shopping checkout functionality in 2023, and Facebook removed native checkout from its platforms in July 2024.

As OpenAI moves forward with its e-commerce project, it remains to be seen how it will navigate the competitive landscape and carve out a space for itself in this dynamic and competitive industry.