AI is having its moment and business leaders appears not to be getting enough of it. From finance to retail, AI is now the golden child of innovation. In a latest McKinsey Global Survey on AI, 78 percent of organizations now use AI in at least one business function, up from 72 percent in early 2024—and a big jump from 55 percent a year earlier

The excitement has spread across different sectors and segments within business. For marketers, every product launch seems to come with shiny new stickers: ‘AI-powered,’ ‘machine learning-enhanced,’ ‘driven by artificial intelligence.’

But here’s the twist: many customers aren’t impressed. In fact, they’re turned off.

The study, which was published in the Journal of Hospitality Marketing & Management, reveals that people are less likely to buy a product when it’s described as using AI.

In the study, researchers from Washington State University and Temple University presented 1,000 respondents with product descriptions. One group saw products labeled as ‘AI-powered.’ The other group saw descriptions that simply said “new technology.” Guess what? The AI group was consistently less likely to buy.

Why? It’s not logic. It’s emotion.

“The main findings of this study is the use of AI decreases emotional trust,” says Mesut Cicek, assistant professor at Washington State University, according to CX Dive. “The consumers have trust issues with AI, and then also it decreases the purchase intention.”

Instead of thinking, ‘Oh wow, this product is smarter!’, customers often think: ‘Will this take my job?’ ‘What if it messes up?’ ‘Is it spying on me?’

You’re hoping they picture efficiency and innovation. They’re seeing Terminator robots and privacy breaches.

Also Read: 3 Actionable Ways to Use AI to Know What Your Audience Wants

The Risk Factor Makes It Worse

Not all products are affected equally. The negative effect gets worse when the purchase feels riskier. A new TV? Maybe not a big deal. But an AI-powered car or medical-diagnostic service? That’s a different story.

Even more, this isn’t an isolated insight. A separate survey by Parks Associates, cited in the Wall Street Journal, asked about 4,000 Americans how AI in product marketing influenced their buying decisions. Only 18 percent said it made them more likely to buy. A larger chunk, 24 percent, said less likely. The rest didn’t care either way.

Among younger folks aged 18 to 44, a decent 24 percent to 27 percent said they’d likely buy AI-marketed products. But for the older, more affluent segment—the people with disposable income—32 percent said they would be less likely to buy if AI was mentioned.

And that’s critical. Because those are the customers who can actually afford what you’re selling.

What Businesses Must Do

Let’s borrow a gem from Harvard Business School legend, Theodore Levitt:
“People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!”

That’s the game-changing insight. Your customers don’t really care what powers your product. They care about what it does for them.

So, stop obsessing over shouting ‘AI-powered!’ in big bold letters.

Instead, tell people what they’re going to get: faster service, better outcomes, smarter decisions, less effort.

Use AI to improve your product. Just don’t lead with it.

The moment you start with ‘this was made with AI,’ you lose a part of your audience. It’s like saying, ‘This article was written by AI.’ Now, many people will subconsciously disengage—even if the content is solid. That’s just how emotional trust works.

As Dogan Gursoy, regents professor at Washington State and co-author of the study, told the Wall Street Journal:

“When we were thinking about this project, we thought that AI will improve [consumers’ willingness to buy] because everyone is promoting AI in their products. But apparently it has a negative effect, not a positive one.”

So here’s the smarter approach: let your features shine, not your tools.

• If AI helped make your app faster, say it’s faster.
• If AI made your customer support instant, say it’s instant.
• If AI helped you recommend better products, say your suggestions are more accurate.

Just like no one buys a drill for its diamond tip—they buy it for the hole—no one cares if your chatbot is AI, so long as it solves their problems now.

That’s what they’re paying for. That’s what earns trust.

And over time? As people become more comfortable with AI in their everyday lives, their resistance will fade. Especially in B2B markets, where decision-makers are already looking for AI-powered solutions to cut costs and boost performance.

But until then, lead with the outcome. Not AI.