WASHINGTON (dpa-AFX) - Alphabet Inc. (GOOGL) is rolling out new features that allow consumers to shop directly within its artificial intelligence products, marking a significant step in the company's effort to generate more revenue from AI-powered search and chat.
In a letter to advertisers, Google announced it has begun testing new ad formats in Google Search's AI Mode, enabling retailers to promote products directly within AI-generated responses. Additionally, users can now purchase items from merchants such as Etsy and Wayfair inside Google's Gemini chatbot. The company also introduced a 'Direct Offers' feature, which will allow brands to present discounts to shoppers within the AI Mode.
'We aren't just bringing ads to AI experiences in Search; we are reinventing what an ad is,' said Vidhya Srinivasan, Google's vice president overseeing ads and commerce.
As consumers increasingly rely on AI tools for answers and recommendations, technology companies are seeking ways to monetize these interactions beyond subscription models. Advertising and embedded commerce are expected to help offset the massive infrastructure investments fueling the AI boom, with capital spending by Google, Amazon, Meta, and Microsoft projected to reach a record $650 billion in 2026.
Google's push follows similar moves by OpenAI, which has begun testing ads in ChatGPT, and by Perplexity AI, both of which are integrating shopping features into their platforms.
Earlier this year, Google also introduced AI agents into its shopping ecosystem, partnering with Shopify, Target, and Walmart to standardize payments and digital identity, allowing users to check out directly within AI products.
The expansion has drawn scrutiny from Washington. Senator Elizabeth Warren has raised concerns about consumer privacy and the risk of AI nudging shoppers toward higher spending.
Google has stated that it prohibits merchants from listing higher prices on Google than on their own websites.
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