When powerful artificial intelligence backfires

Abstract

Despite recent advancements in artificial intelligence (AI) in hospitality, little is known about its unintended consequences on consumers’ privacy concerns. Through an empirical package combining qualitative and quantitative evidence, this research reveals that framing AI as “powerful” enhances privacy concerns (Studies 1–5) by reducing AI-control over data (Study 3). Notably, such effects are reduced in consumer-human agent interactions and increased in consumer-AI ones (Study 4). Finally, interventions providing privacy guarantees can reduce privacy concerns stemming from powerful artificial agents and enhance willingness to disclose data (Study 5). Our findings highlight the unique issues arising from human-AI interactions when using powerful AI and their influence on consumers’ privacy concerns and provide practical implications for hospitality managers.