OpenAI Challenges Google & Amazon with New Shopping System

ChatGPT Integrates Shopping: A Shift in E-commerce Power

Users of ChatGPT within the United States are now able to complete purchases from Etsy, with Shopify integration planned for the near future. This development signifies a considerable advancement in the evolution of online shopping, impacting both consumers and the platforms responsible for product discovery, recommendations, and payment processing.

New "Instant Checkout" Feature

OpenAI’s recently launched “Instant Checkout” functionality is accessible to ChatGPT Pro, Plus, and free users who are logged in and purchasing from Etsy sellers based in the U.S. Furthermore, over one million Shopify merchants, including well-known brands like Glossier, Skims, Spanx, and Vuori, are slated to be added shortly, according to OpenAI.

This new feature expands upon previous ChatGPT shopping capabilities. These earlier features presented relevant products, images, customer reviews, pricing, and direct links to merchants in response to shopping-related queries. For example, a user could ask, “what gift should I buy for a friend who enjoys ceramics?” or “what are the best sneakers for office wear?” Now, users can simply select “Buy” to finalize their order, confirm shipping details, and submit payment information.

Expanding In-Chat Commerce

Payment options include Apple Pay, Google Pay, Stripe, and standard credit card payments. Similar in-chat shopping and payment features were previously introduced by Perplexity last year. Microsoft also provides merchants with the ability to establish in-chat storefronts through the Copilot Merchant Program.

This streamlined, frictionless shopping experience has the potential to initiate a new trend in online retail. It could move consumers away from traditional search engines like Google and large e-commerce platforms such as Amazon, towards conversational AI agents offering curated recommendations, product comparisons, and simplified checkout processes.

A Reshaping of E-commerce Control

This development is also establishing the conditions for the emergence of new key players within the e-commerce landscape. For a long time, Google and Amazon have functioned as the primary gatekeepers for retail product discovery.

Should a greater volume of purchases begin within AI chatbots, the companies developing these chatbots will gain increased control over product visibility and the associated commissions or fees.

Both Amazon and Google have historically utilized their market dominance to prioritize their own products or favored partners, potentially suppressing competitors in search results or imposing substantial fees on sellers to ensure visibility. OpenAI has stated in a blog post that the product results displayed are “organic and unsponsored,” ranked solely on their relevance to the user’s query.

The company also indicated that it will charge merchants a “small fee” for each completed transaction.

Open Sourcing the Agentic Commerce Protocol

In addition to the launch of in-chat checkout, OpenAI announced that it will open source its Agentic Commerce Protocol (ACP). This is the technology powering Instant Checkout, and was developed in collaboration with Stripe. The open-sourcing will allow other merchants and developers to integrate agentic checkout capabilities.

“Stripe is building the economic infrastructure for AI,” stated Will Gaybrick, President of Technology and Business at Stripe. “This involves re-architecting current commerce systems and creating new, AI-driven experiences for a vast number of users.”

While some consumers may be hesitant to share private payment information with ChatGPT, the company assures that order processing, payments, and fulfillment are managed by the merchant using their existing systems. ChatGPT functions solely as an agent, securely facilitating information exchange between the user and the merchant.

Implications for the Future

Open sourcing the ACP simplifies integration for merchants, encouraging wider adoption of AI chatbots as virtual storefronts. It also potentially expands OpenAI’s influence as a gatekeeper for retail discovery and checkout, potentially positioning the firm as the leading architect of the AI commerce ecosystem.

This development creates a competitive dynamic with Google, which recently introduced its own open protocol for AI agent-initiated purchases, known as the Agent Payments Protocol (AP2).

• Key Takeaway: OpenAI's move signals a potential shift in e-commerce power dynamics.
• Impact: Consumers may experience more personalized and streamlined shopping experiences.