Welcome to Eye on AI! In this edition…The UAE closes in on a deal for advanced Nvidia chips days after Saudi Arabia’s Humain strikes a similar agreement…Google DeepMind introduces AlphaEvolve, a coding agent that can design its own advanced algorithms…and China restricts schoolchildren’s use of generative AI.
For those who read my ‘I hate shopping’ manifesto in Eye on AI a few weeks back, where I shared how ChatGPT became more helpful for my style quests than Google, there was an obvious follow-up: What if I could make purchases in my AI chat?
When I started writing about the early versions of AI agents two years ago, that was the holy grail developers pointed to—shopping. For some reason, though, they were always interested in how to have an AI agent buy your pizza, not pick out and order the best dress for that summer wedding next month.
But pizza or not, those early efforts mostly fizzled, because there were so many seemingly insurmountable hurdles. Early agent efforts in 2023, like Auto-GPT and BabyAGI, were primarily focused on surface-level web manipulation—that is, having an agent operate a web browser and the user’s computer keyboard and mouse, and giving it access to a file with passwords and credit card data. But even the best AI systems can misinterpret website layouts, leading to transaction failures, and AI computer usage tools are relatively slow. Having a file sitting around with all your password and credit card data also creates cybersecurity risks.
Giving the AI direct access to vendors’ backend systems would be a simpler, and better, way to enable agentic commerce. But every vendor’s backend—like a pizza place’s payment processing, a bookstore shopping cart, Amazon’s inventory—is its own walled garden that needs logins and authentication. There was the lack of persistent memory for AI agents, who might not remember where you left off while picking out that dress. Then there’s payment information–not surprisingly, most of us are reluctant to hand over our financial information to AI agents, and anyway, how could ChatGPT handle credit card or Venmo transactions anyway?
This technology is changing the AI shopping game
That’s all changing now, thanks to an under-the-radar AI revolution called Model Context Protocol (MCP). Developed by Anthropic last November, the MCP architecture allows AI agents to “remember” context, execute transactions, and manage interactions in real-time across multiple platforms. With a standardized layer connecting to payment gateways, e-commerce inventories and financial services, AI agents are on the brink of being able to do far more than just window-shop.
Of course, for this to work, all the different parties involved have to agree to use MCP. That’s happening: Over the past two months, Google, Microsoft and OpenAI have all agreed to use MCP. Payment processors have followed suit: Visa is also partnering with Anthropic, Microsoft, Mistral, OpenAI, Perplexity, and other leading tech players to bring seamless payment capabilities directly into AI chatbots, while MasterCard also announced the launch of its agentic payments program called Agent Pay. Stripe and Block (formerly Square) have gotten on board with MCP as well, and yesterday, PayPal announced a partnership with AI search startup Perplexity to power agentic commerce in its Pro platform. Starting this summer, the company said consumers can check out with PayPal or Venmo when they ask Perplexity to find products, book travel, or buy tickets.
However, retailers have not jumped on board as fast as the payment processors. One company, Retail-MCP.com, has created a managed MCP service for retailers, but it’s not clear any major brand has launched an MCP server yet. But it will no doubt happen.
For PayPal, agentic e-commerce is coming fast
I spoke yesterday with Prakhar Mehrotra, PayPal’s head of AI, who told me that Anthropic’s release of MCP marked the moment he realized agentic e-commerce was becoming a reality.
“The unsolved problem was how two agents could communicate with each other,” he said. First, he explained, the AI needs to understand what you want to do—like booking a flight to Paris or reserving a table at a restaurant. But then other agents need to work together: One agent might handle flight booking, for example, while another handles a local dinner reservation and a third tackles payment processing for both. Until now, agents could not communicate with each other, so a chatbot could only recommend—not complete the actual purchase on multiple platforms.
Now, six months after the release of MCP, the age of “identity commerce” is upon us, Mehrotra said–that is, AI’s ability to handle user transactions that are secure and personalized across platforms, so agents can complete real-time purchases without any manual logins (and without having to use a web browser; MCP works by directly transmitting data back and forth in a standardized protocol between the AI agent and an MCP server operated by a retailer that is seperate from the one hosting its e-commerce website).
According to PayPal, the entire AI-powered shopping process—from payment and shipping to tracking and invoicing—will happen in the background. It will connect directly to your PayPal or Venmo account, using emerging technology that securely stores your payment details and lets you check out with just a single click or voice command—without the need for passwords.
It’s still a little hard for me to imagine using Venmo or Visa to buy a new outfit using Perplexity or ChatGPT. But I’ll be an early AI shopping adopter, no doubt–and I’ll let you know how it goes.
With that, here’s the rest of the AI news.
Sharon Goldman
[email protected]
@sharongoldman
This story was originally featured on Fortune.com
