Some Ai Trends to Watch…

THE DATA.

1. ChatGPT monthly revenue gets jolt

After 5 quarters of decelerating revenue, May goes positive in App Store.

2. Age matters in Ai.

Over 50% of 18-24 year olds use Character Ai as main ai app today.

3. Ai Chatbots taking some search share.

Survey shows 30% using Ai chatbots.

?? THIS WEEK

Happy Friday! We hosted our quarterly earnings investor webcast this week. Drop us an email if you'd like access to the recording. This week's earnings reports unveiled some intriguing trends. Walgreens posted disappointing results, underscoring ongoing challenges in traditional pharmacy services as online convenience gains further ground. Additionally, we observed softening economic indicators, reinforcing the case for potential rate cuts, a topic we've discussed since late last year. This week, we're sharing insights from competitive trends in AI, spanning from traditional search engines to emerging AI applications.

Data #1

ChatGPT App Store Revenue Ticks Higher After 5 Months of Declines.

Why does this data matter?

Over the past five months, ChatGPT has experienced a consistent decline in revenue relative to the prior month. This decline occurred as the company opted to disable certain paid features in response to the rise of freemium models in the market, ie Meta Ai and Google’s Gemini.

This strategic shift has sparked questions from us tracking this about their overall approach. While focusing on long-term enterprise adoption remains a priority, the company has a big opportunity in the consumer market. Ie all of Google’s search business. To compete effectively against behemoths like Google, driving user engagement is crucial, alongside ensuring profitability within the consumer segment to fund it. What was interesting is that the recent launch of OpenAI's newest model has shown promising signs of boosting demand for paid services, highlighting a trend to closely monitor going forward.

Data #2

CharacterAi Winning Over Young Ai Users

Why does this data matter?

We are also paying attention to trends among age groups. AI usage across age groups reveals interesting trends, atleast early on here. Character AI, known for its interactive virtual companions, commands significant attention among younger age people, specifically 18-24-year-olds, where it captures over 50% of the market. However, interest declines pretty quickly ans age increases. In the 25-34 age bracket, ChatGPT and Google’s Gemini show up as the main options, while DeepL, which if you don’t know them, they are know for precise translation, gains traction among those aged 35-44. Another take we have is that there's a decline in AI usage with older age groups, which we at Avory think mimics trends seen in social media adoption. This suggests that the landscape of AI applications and search functionalities will likely evolve differently across age cohorts, emphasizing the importance of targeted strategies for various demographic segments. Time will tell.

Data #3

30% Using Ai Chatbots to Search

Why does this data matter?

The evolution of AI apps is reshaping how we search for information across various channels. Personally, I've noticed a shift in my own habits, with platforms like Instagram now serving as primary sources for restaurant and travel insights, roles traditionally filled by Yelp and TripAdvisor. According to recent surveys, AI apps now account for 30% of search activity. While it remains unclear if this surge is driven by current hype or represents a sustainable trend, the growing engagement and development of new user experiences suggest real competition ahead. Despite this, traditional search engines maintain their dominance, capturing the majority of searches, while social platforms contribute 17%. All this stuff is hard to parse through with a clear conclusion however this dual landscape gives Google a leg up in combining both traditional habits with new generation formats for answers and intelligence.

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