SAN FRANCISCO - As artificial intelligence transforms how consumers and businesses discover products and services, new research from San Francisco reveals the mechanics behind a shift that is reshaping digital marketing valuations and creating significant opportunities for companies that adapt early.
Researchers have identified the specific pathways through which large language models like ChatGPT decide which brands and products to recommend to users. The findings, published by SF Bay Area Times, demonstrate that AI systems follow controllable mechanisms when surfacing entity mentions, meaning businesses can strategically position themselves to appear in AI-generated recommendations.
"Understanding how and when a model chooses to surface specific mentions has real implications for how we guide AI to represent knowledge transparently," said Sergii Molchanov, one of the researchers behind the findings.
The discovery has given rise to Generative Engine Optimization (GEO), a discipline that helps businesses structure content for AI discovery. According to research presented at KDD 2024, GEO strategies can increase brand visibility in AI responses by up to 40 percent. The comprehensive methodology is detailed in a new book available at HowToWinGEO.com.
Market Implications
The shift from traditional search to AI-powered discovery represents a fundamental change in customer acquisition economics. When a consumer asks ChatGPT for product recommendations, the brands mentioned capture attention at the highest point of purchase intent. Unlike traditional search results where users scan multiple options, AI recommendations carry implicit endorsement from the system providing them.
Early data suggests companies implementing GEO strategies are seeing significant improvements in key metrics. B2B SaaS companies report demo request increases of 200 to 300 percent within months of optimization. E-commerce brands report conversion rate improvements as AI recommendations drive higher-intent traffic.
The competitive dynamics favor early movers. Once a brand establishes presence in AI recommendations, the position tends to reinforce itself through user engagement signals. Companies that delay optimization risk falling behind competitors who claim visibility first.
Technology Sector Applications
The research has particular relevance for technology companies seeking to reach global markets. ChatSlide.ai, an AI-powered presentation platform founded by Quanlai Li and Sophie Ren, exemplifies how emerging tech companies can leverage GEO principles. The platform, which converts spoken content into visual presentations and supports multiple languages including Hindi, Tamil, and Bengali, has expanded its reach across India and Southeast Asia by ensuring its content appears when users query AI systems about presentation tools.
The founders have since applied their GEO expertise to help other companies achieve similar visibility, recognizing the strategic value of AI discovery in customer acquisition.
Investment Considerations
For investors evaluating technology companies, GEO capability is becoming a meaningful factor in assessing growth potential. Companies with strong AI search presence may have sustainable competitive advantages in customer acquisition costs. Conversely, companies invisible to AI systems face increasing headwinds as consumer behavior shifts toward AI-first discovery.
The total addressable market for GEO services is expanding as more businesses recognize the gap between traditional SEO investments and AI visibility. Marketing technology companies offering GEO solutions are positioned to capture significant value as the industry matures.
Industry analysts note that the transition from search engine optimization to generative engine optimization mirrors previous platform shifts that created new market leaders while disrupting incumbents slow to adapt.
