Artificial intelligence (AI) chatbots are transforming the way people interact with businesses and the internet as a whole. AI-powered chatbots are becoming increasingly popular in many industries, from customer service to e-commerce. Chatbots typically operate by being given vast amounts of data to process and are then capable of answering queries in a human-like fashion. AI tools such as Siri or Alexa have been around for a while but the next generation of chatbots such as ChatGPT exceed the capability of these by far. Rather than simply answering questions based on web searches and providing links, new AI chatbots can provide extensive human-like answers on almost any topic. Impressively, they can produce perfect essays, articles, speeches, contracts and even computer code in any style, length and format that the user requests. It can also analyse articles or code, finding errors and mistakes while suggesting ways to improve.

Such chatbots could be revolutionary and tech firms are betting big. Microsoft has invested over $13 billion in OpenAI, the creator of the popular chatbot ChatGPT. Google also announced $300 million in new investment in an AI start-up.  While these chatbots have many benefits, such as 24/7 availability and improved efficiency, they also raise legal and commercial concerns. In this article, we explore the benefits and drawbacks of AI-powered chatbots and search engines from a legal and commercial perspective. 

Benefits of AI-Powered Chatbots

Increased Efficiency

Improving efficiency is one of the main benefits of AI chatbots. The ability of these bots to write and analyse detailed information in any spoken or computer language has enormous potential. Magic circle firm Allen & Overy, recently announced that it would be introducing a legal chatbot called Harvey, to help its lawyers. Harvey can perform a plethora of tasks, such as drafting and analysing contracts. This will remove much of the tedious leg work for lawyers and paralegals. 

Another significant efficiency boost provided by AI chatbots is its ability to write code. Current bots like ChatGPT, cannot yet write complex code required for advanced applications like banking apps but it can create basic code. This will reduce the need for developers to write boilerplate code and instead leave them with the more complicated and advanced tasks. 

The use of advanced AI chatbots for customer service tasks can also provide greater efficiency. These chatbots can handle a large volume of customer inquiries simultaneously, without the need for human intervention. Currently, basic chatbots with limited answering capabilities can be off-putting for consumers but advanced chatbots can provide a human-like service with greater efficiency. 

Personalisation

We already have a taste of personalised AI technology in tools such as Alexa and Siri. The use of cookies across the internet also allows search engines to provide highly personalised suggestions on content we’d like to see and products we want to buy. AI-powered chatbots and search engines combine the two and can truly personalise the customer experience. They can providing customised recommendations and responses based on user behaviour and preferences. This can lead to higher customer satisfaction and increased loyalty. On the flip side however, the use of cookies and high levels of personalisation is off-putting for many people. Searching for a product one day and then constantly seeing adverts of it for the next week is not desirable for many. While for advertisers and businesses, advanced personalisation could provide better targeting of customers, for users it may prove too invasive. 

Costs Savings

One of the largest long term benefits of AI chatbots is the potential financial savings. By reducing the need for human intervention, AI-powered chatbots can lead to cost savings for businesses. This is particularly true in industries where customer service is a major cost driver. Research by Gartner shows that replacing human agents with AI chatbots could save the call centre industry up to $80bn per year in labour costs. By 2031, this could sky rocket $240bn (link). Furthermore, these can operate 24/7 for a fraction of the cost of hiring staff to handle queries over this period. 

Drawbacks of AI-Powered Chatbots 

Job Losses

AI-powered chatbots and search engines can eventually replace human workers, which can lead to job losses in certain industries. This can have a negative impact on the broader economy, especially if it happens too quickly. Consultancy firm, McKinsey & Company estimates that AI could displace up to 800 million jobs globally by 2030 (link). If AI tech is adopted too widely and too quickly there could be significant levels of unemployment. 

It is worth noting however, that automation has always been criticised for causing vast job losses but ultimately new jobs arise in their place. AI technology will be no different. For example, there may be new AI related job roles, such as those who are experts in using chatbots to produce complex pieces of work. The fear of job losses comes alongside any new significant technological advancement and while it may be it risk, it is typically overstated.

Legal Liability

Chatbots and search engines can potentially and often do provide inaccurate or misleading information, which can lead to legal liability for businesses. For example, if a chatbot provides incorrect medical advice, the business that operates the chatbot could be held liable for any resulting harm. For many businesses, this will limit the potential use cases of AI chat bots. To avoid any liability, disclaimers will need to be inserted and important information provided to clients will need to be reviewed by real people. This however, undermines the argument that chatbots will take all our jobs as human input will still be necessary in most use cases. 

Loss of Internet Traffic

AI-powered search engines can potentially reduce internet traffic to content producers and advertisers. This is because chatbots typically scrape the internet and provide human-like answers to queries without referencing the sources used. Current search engines like Google and Bing direct users to a range of options and products, something which chatbots in their current form do not do. This can have a negative impact on content producers and advertisers, such as news outlets, who rely on traffic to generate revenue. News outlets will undoubtedly protest widespread use of this data scraping without referencing if chatbots become widely used over traditional search engines. Ultimately, however, if these content producers stop advertising, the tech giants behind many of these chatbots will face catastrophic losses. Google made 80% of its revenue from advertising in 2022, a whopping $279 billion. 

Conclusion

Taking all into account, AI-powered chatbots and search engines have many benefits, including increased efficiency, 24/7 availability, personalization, and cost savings. However, they also raise legal and commercial concerns, including legal liability, loss of jobs, privacy concerns, and loss of internet traffic for content producers and advertisers. It is important for businesses to carefully consider these issues when implementing AI-powered chatbots and search engines, and to take steps to mitigate any potential negative impacts. This may include complying with relevant laws and regulations, limiting liability through clear terms of service and disclaimers, and investing in other marketing strategies to drive traffic to their websites and products. Ultimately, AI-powered chatbots and search engines have the potential to transform many industries, but businesses must navigate these issues carefully to ensure that they can take advantage of the benefits while minimising the drawbacks.