‘B2C companies who we serve, so we would be a B2B2C company, want to know what their role is and how they would have to identify to serve customers. And if they believe that AI has no role to play with their end consumers, I think that’s a bad choice they’re making,’ says Babak Hodjat, Cognizant’s CTO of AI.
Younger AI enthusiasts are expected to influence about $4.4 trillion in consumer spending in the U.S. by 2030, according to a new study by global solution provider Cognizant.
Cognizant, ranked No. 8 on CRN’s 2024 Solution Provider 500, worked with Oxford Economic on its “New Minds, New Markets” study, which also projected that AI enthusiast consumers from 18 to 44 years old will drive $960 billion in spending in the U.K., $669 billion in Australia and $539 billion in Germany.
The new research follows a similar study Cognizant did a year ago focused on how Generative AI will impact work, said Babak Hodjat, Cognizant’s CTO of AI.
Hodjat said that, while Cognizant is a B2B company, it is important to understand trends in the B2C space.
“B2C companies who we serve, so we would be a B2B2C company, want to know what their role is and how they would have to identify to serve customers,” he said. “And if they believe that AI has no role to play with their end consumers, I think that’s a bad choice they’re making. Their consumers are going to start expecting AI to give them options. That’s what we’re seeing. That’s what this report is giving us. And so we’re trying to inform our customers, our clients, what the behavior is going to be and what the market potential is going to be. This lets us come help build that out for them,” he added.
[Related: Cognizant Ties AI Agents From Multiple Apps For Scale, Autonomous Operations]
“We looked at all the jobs and found there were wide implications, even on Cognizant,” Hodjat told CRN. “We saw things like, how do we upskill? Where do we look at, for example, agentification and all that?”
The research looked at how consumers with AI and generative AI tools would use them and broke the results into three stages, he said.
“The first stage is you’re researching,” he said. “Let’s say you want to go on a trip and you’re researching all the options that you have. Step two is you’re actually transacting on the travel plan you have in mind and buying the airline ticket and getting the hotel and whatever. And step three is you’re using, for example, you’re traveling right now. So you research it, you buy it, and then you use it.”
The study found that a large majority of Gen Zers and the younger generation are perfectly fine with using GenAI to do the research but are not yet ready to give their credit card to an AI agent, Hodjat said.
“So on the transaction side, it’s a small minority that would actually allow the agent to autonomously make the buy decision and do the transaction,” he said. “On the use side, it’s somewhere in between.”
Overall, the study shows there is a surprisingly big role for GenAI when it comes to consumers, particularly on the investigation part, Hodjat said.
“The implication is consumers will use agents or multi-agent systems which, on behalf of the consumer, will go out and search the web, call APIs, look up data, and come back and say, ‘Here are the choices I found,’” he said. “And there’s a considerable number of consumers that will trust the agents to do that. At that point they would want to make the transaction. That’s perfectly fine. And I think there will be a growing set of users that would then trust the system to help them with the usage part.”
GenAI will also increasingly be used by those consumers to do things like reorder a previously ordered item, whittling down the options to choose from, Hodjat said.
“And that’s huge,” he said. “That just shows that AI will play a big role in consumers and consuming, especially for B2C. [Cognizant is] working on agent-based systems on the business side which will have a consumer-facing agent that as humans we would talk to, like, ‘Hey, Airbnb, I want to make a decision on my travel. Give me options and stuff like that.’ But it’s owned by Airbnb. It’s not on the side of the consumer. So imagine if the consumer has agents, and that consumer agent network talks to agents owned by various different companies like Airbnb, Expedia, United Airlines and so on to negotiate on behalf of the user.”
This is no longer science fiction, Hodjat said.
“You already have users relying on AI agents to come up with their options, and you have B2C companies that are putting together multi-agent systems, and these AI agents will have to talk to each other,” he said. “But what goes out of the window is this assumption that agents are all aligned and working together. When building something for a company, all the agents are considered to be friends, like employees, working together for a common goal. But if you have a consumer agent talking to company’s agent, then one of them is trying to get the best price and one is trying to sell you something.”
Hodjat also said there is a big age gap between the young consumers and older consumers in terms of their plans to use AI.
“Younger people are the early adopters,” he said. “We will catch up, I’m sure, just like with other technology. But I can tell you, I have a son who’s 26 years old who makes many decisions using ChatGPT, more than I’m comfortable with. He’s like, ‘Every step of the way, give me my options. I want to go online and search for this camera lens that I want to buy.’ Or ‘I’m just looking at this thing. Tell me what you think about it.’ I would have expected these folks to be more skeptical of AI, but no, I do see that in the younger generation. They’re adopting it at a far faster pace than we are.”
