ARK Invest said in November that artificial intelligence-powered digital wallets could revolutionize e-commerce, potentially driving nearly $9 trillion in global online spending by 2030 through the integration of Large Language Models into payment platforms.
What Happened: The Cathie Wood-led firm's latest research suggests that AI "purchasing agents" embedded in digital wallets like Shopify Inc's (NYSE:SHOP) Shop Pay, Cash App owned by Block Inc (NYSE:SQ), and Apple Inc.'s (NASDAQ:AAPL) Apple Pay could transform the traditional one-click checkout into a streamlined one-query purchase experience.
This development comes as major tech companies, including Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) and Amazon.com Inc. (NASDAQ:AMZN), are rapidly advancing their AI shopping capabilities.
ARK's research suggests AI purchasing agents could disrupt Google and Amazon's dominance by automating product comparisons and purchase decisions, reducing reliance on search engines and marketplaces.
Klarna's integration with Microsoft Corp. (NASDAQ:MSFT) backed OpenAI technology demonstrates early adoption of this trend, with its shopping assistant combining search and aggregation based on user preferences.
"Digital wallets helmed by purchasing agents could increase their share of global e-commerce purchase volume from 50% in 2023 to 72% by 2030," according to Ark Invest's analysis.
The firm projects that if 10% of global AI agent spending occurs through digital wallets with a 5% lead generation fee, these AI purchasing agents could generate $43 billion for digital wallet providers.
Why It Matters: Recent market developments support this trajectory. Amazon's AI shopping assistant Rufus, launched nationwide in July, has already demonstrated the potential of AI in e-commerce by helping customers with product details, recommendations, and comparisons.
Meanwhile, Google's reported development of "Project Jarvis," an AI system designed to handle shopping and travel bookings, suggests growing competition in this space.
The impact of AI on e-commerce was particularly evident during Black Friday 2024, when online sales reached $10.8 billion, marking a 10.2% increase from 2023. Retailers using AI chatbots saw a 1,800% increase in website traffic and a 9% higher conversion rate compared to those without AI integration, according to Salesforce data.
Ark Invest emphasizes that success in this space will require digital wallet providers to balance personalization with user privacy and trust. The firm suggests that similar to credit card rewards programs which distributed $40 billion in rewards in 2022, digital wallets will need to offer compelling incentives to drive adoption.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
