I've Purchased My Socks Through an AI: What Does That Mean for Privacy?

AI tools are increasingly helping us make decisions, and we are entering a new phase called AI-mediated transactions. In these cases, an AI doesn’t just provide information—it can suggest products and even complete purchases.

For example, if I’m talking to an AI about wool socks, it might recommend products and let me buy them directly through the AI using a familiar retailer. The convenience is clear: no app switching, no leaving the conversation.

But there are important caveats, especially around privacy and transparency.

Customer Privacy: What Will Retailers Know?

Unlike traditional websites that rely on cookies, AI interactions can reveal much more about you. Your preferences, decision-making process, and even personal context can be captured in conversation.

Even with privacy laws and self-imposed limits, AI platforms could combine information from multiple interactions, purchases, or external data sources to build a more comprehensive profile of a user than any single session alone would show.

Terms of Service may allow companies to share this data with marketing partners, similar to the yearly privacy notices we see from other services, but potentially more extensive given the conversational nature of AI.

Bias in Conversations

AI-mediated transactions also raise concerns about subtle bias. Trusted AIs could favor certain products or services from paying partners, influencing your decisions before you even see all options.

This is similar to paid search results or advertising, but more subtle. It resembles a concept from magic called a magician’s choice, where you think you’re making a free decision, but your options are carefully constrained.

Commercials and Ads in AI

To support free or low-cost platforms, ads or personalized content may become part of the AI experience. Terms of Service may allow your data to be used for these purposes in exchange for lower costs or free access.

We may also see pre-generated or personalized video ads integrated into AI sessions sooner than expected. As AI capabilities grow, the cost of running these platforms rises, making monetization through advertising or data sharing more likely.

Bottom Line

AI-mediated transactions offer convenience, but they also raise questions about data privacy, transparency, and influence on decision-making. As these systems become more common, understanding how your information is used will be essential.