AI e-commerce is accelerating its landing, Alphabet Inc. Class C (GOOGL.US) Gemini and retailer token demand surges as a key catalyst.

HSBC's recent research report shows that the increasing demand for tokens by retailers, the introduction of artificial intelligence (AI) into the shopping experience by Alphabet Inc. Class C (GOOGL.US) subsidiary Gemini, and the early actions of companies such as Microsoft Corporation (MSFT.US) indicate that AI e-commerce is currently experiencing development, even though the technology is still in the validation stage. HSBC pointed out that on January 11th, the CEO of Alphabet Inc. Class C, Sundar Pichai, delivered a speech at the National Retail Federation in the United States, emphasizing that the retail sector alone processes over 900 trillion tokens on Vertex AI (a business-oriented API), which is expected to reach 8.3 trillion tokens by December 2024. Based on the significant increase in retail token input, Alphabet Inc. Class C has introduced AI tools for them. This includes the Gemini Enterprise version for customer experience, which provides assistance to retailers through features such as shopping assistants, support for Siasun Robot&Automation, intelligent visual search, and product promotions. It is worth mentioning that Alphabet Inc. Class C's newly announced Universal Commerce Protocol (UCP) is an intelligent visual AI shopping tool designed to help consumers transition from the "discovery-purchase" stage to post-purchase support. This is a new open standard that will allow different visual AI to communicate with each other. UCP will support a checkout function (via AI mode with the Gemini app), allowing consumers to directly complete checkout with a select group of qualifying primary retailers. Additionally, Alphabet Inc. Class C will be testing a "Direct Offers" feature, allowing advertisers to display special offers in the AI mode. Alphabet Inc. Class C also announced the "Commerce Visual AI" feature, allowing shoppers to communicate directly with brands on the search page. US retail giant Walmart Inc. (WMT.US) was one of the earliest retailers to adopt this technology from Alphabet Inc. Class C. Last Sunday, Walmart Inc. and Alphabet Inc. Class C jointly announced that consumers will be able to explore products and complete purchases more conveniently at Walmart Inc. and its warehouse membership store Sam's Club through Gemini. Walmart Inc. noted that UCP addresses three customer needs: 1) Categories and pricing: Gemini will include Walmart Inc. products relevant to the search, with interactive continuity allowing products to be shown throughout the entire conversation process. 2) Personalization: Complementary products will also be displayed when Walmart Inc. products are shown in Gemini. 3) Fast delivery: Reiteration of delivery terms (non-AI-related innovation). HSBC stated that Alphabet Inc. Class C is not the first company to introduce AI e-commerce features, as several companies have already integrated AI e-commerce options into their products. In September 2025, OpenAI introduced instant checkout in its chat GPT, and in January of this year, Microsoft Corporation launched Copilot checkout and brand visual AI. Their use cases showed an increase in purchase volume by over 53% within 30 minutes after interaction, and a conversion rate increase of over 194% when there is a clear shopping intent. Additionally, Amazon.com, Inc.'s Rufus AI shopping assistant, and the updates on Alexa+ at CES are also noteworthy. In this research report, HSBC rates Alphabet Inc. Class C's stock as "Buy" with a target price of 370 US dollars; and rates Microsoft Corporation, Walmart Inc., and Amazon.com, Inc. as "Buy."