A new wave of consumer software is emerging, driven by generative artificial intelligence (AI), creating innovative categories like AI companions, conversational search, and video generation tools. Character.AI and CapCut exemplify this shift, with CapCut boasting 736 million active monthly users and leveraging AI for features such as background removal and auto-captions. Established tools like Canva and Notion are also enhancing their offerings with AI, significantly increasing their user engagement and revenue.
Consumer habits are rapidly shifting, with over 60% of U.S. users engaging with dedicated AI platforms, indicating a marked preference for AI over traditional search. Despite a burgeoning $12 billion market, only 3% of users subscribe to premium services, highlighting a monetization challenge. The potential for AI to mirror the platform-shifting impact of smartphones remains uncertain, but current usage trends suggest a strong foundation for sustained growth in AI-native categories. For insights on consumer AI, subscribe to our daily AI Newsletter.
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