Predictions for the long arc of consumer behavior, AI, and market disruption

The convergence of technological breakthroughs and shifting consumer behaviors has historically sparked transformative waves of innovation in consumer technology. According to Bessemer Venture Partners, these “consumer earthquakes” create opportunities for companies that can deliver superior product experiences while achieving viral, organic growth—a pattern now accelerating with the rise of artificial intelligence applications across multiple consumer sectors.

The big picture: The consumer AI landscape is being reshaped by three fundamental drivers that are creating unprecedented opportunities for innovation and market disruption.

• Foundation model costs have plummeted dramatically, with ChatGPT-4 token prices dropping 85-95% since March 2023.
• Multimodal AI models have achieved significant advances in speech, voice, and visual processing capabilities.
• Enhanced reasoning capabilities in foundation models are enabling automation of complex consumer interactions.

Key trends: Five distinct categories of consumer AI applications are emerging as primary areas of innovation and growth.

• AI-enabled professional services are transforming personal task management through tools like Duckbill for life administration and Ollie.ai for meal planning.
• Next-generation marketplaces are using AI to reduce friction between service providers and consumers.
• Social and gaming platforms are leveraging AI to create more interactive, user-generated experiences.

Market evolution: AI is fundamentally changing how consumers discover and interact with products and services.

• Shopping platforms are implementing natural language search and virtual try-on experiences.
• Creation and productivity tools are becoming democratized through text-to-app platforms and AI-driven editing capabilities.
• Multimodal product discovery systems are enhancing personalization and search functionality.

Why this matters: The convergence of declining AI costs, improved model capabilities, and enhanced automation is creating opportunities for startups to rapidly scale novel consumer applications across multiple sectors.

Historical context: Previous consumer technology successes like Pinterest and Airbnb emerged from similar convergences of technological capability and consumer behavior shifts, suggesting the current AI wave could produce equally transformative companies.