How Generative AI Is Changing Online Consumers

To understand what AI is building on and where it may lead, let’s first recall how far the consumer internet has come.

A brief history of the consumer internet

From the 1990s to 2000, Web 1.0 provided consumers with a new method of transferring information from user to user. The period was defined by several characteristics including desktop computers being the primary interface for the internet, a relatively open-sourced ecosystem, and the emergence of ecommerce and digital advertising. But there’s a lack of good algorithm to discover content and products.

Web 2.0 falls between 2000 and the 2020s, prominently marked by the launch of smartphones, which provided a new channel and interface to access the internet. This led to increased online traffic and engagement, along with new consumer behaviors that prompted more mobile applications and a shift in the competitive environment. Websites evolved from distributing static content to becoming more interactive and dynamic. Certain platforms and companies emerged to become dominant forces in their respective spaces.

New ways to monetize on the internet also emerged with more sophisticated digital advertising formats, subscriptions, freemium models (driven by streaming media), and more complex marketplace models, including peer-to-peer sharing and the gig economy.

What will the Interactive Web era look like?

As we’re ushered into the Interactive Web era, the way consumers start their online journey may change. Goldman Sachs Research believes the device and user interface – which is the user’s point of access to the internet – could be defined by mobile devices and the next evolution of smartphones. Elements may include increased personalization and aggregated assistant-driven behaviors such as increasing AI presence through mobile apps or revamped on-device assistants.

Our analysts expect the discovery of content and goods to be increasingly automated, curated, and outsourced to AI platforms. This may potentially reduce manual discovery or browsing by users, and complex tasks would increasingly be done by AI, such as ecommerce shopping or travel planning and booking.

Over the long term, our analysts see potential in new devices in providing fresh internet access points for users, such as wearables and Augmented Reality/Virtual Reality glasses and headsets.

Furthermore, Goldman Sachs Research believes new monetization models may emerge, similar to what happened in prior phases such as early digital advertising and ecommerce in Web 1.0 as well as the subscriptions and gig economy in Web 2.0. The new creator economy may be infused with AI tools, accelerating a shift toward individual creators – a move that has already begun during the late Web 2.0 phase.

How will AI impact content publishers and users?

Our analysts see that data and content licensing by publishers to AI platforms, for training and surfacing of content in AI responses, has emerged as a stream of monetization for publishers with high-quality content or data. This is an important area of focus given that questions surrounding fair use and copyright infringement by AI model builders could hurt publisher advertising revenues as content discovery become more outsourced to AI.

For instance, publishers typically rely on search engine algorithms and referral links to drive traffic to their content. But AI chatbots could potentially diminish this revenue as they surface content from a query response instead of directing traffic to a publisher’s content.

AI risks and regulatory catch-up

Since generative AI tools are relatively new and evolving, Goldman Sachs Research believes it will take time for regulators and legal bodies to develop views, regulations, and frameworks surrounding this technology.

The same issues from Web 2.0 social platforms on content moderation, misinformation, data privacy, and copyright will continue to raise questions over the speed of AI development. Ethical concerns of generative AI’s impact on plagiarism, potential shifts in job skills needed, and the risk of lowering compensation (because of the tools) remain top of mind for content creators.