Spending on artificial intelligence—think data centers—may have accounted for as much as half of GDP growth in the first half of the year. But economic growth does not always equal a better deal for consumers. Early tech adopters in the food space remind us why.
To be sure, plenty of food tech innovations, from photosensory machines to sort cherries to rapid sequencing of Listeria genotypes, have made our food system safer, healthier and more affordable. But food companies have also increasingly deployed technology to thwart consumers’ best interests. As detailed in a recent lawsuit by the San Francisco City Attorney, large food manufacturers engineered and marketed ultra-processed food products to spur overeating and food addiction, particularly among children in poor communities. UPFs now account for 70% of the calories that children eat, fueled by an estimated $2 billion that food companies spend in the U.S. each year on food marketing to children.
Food marketing deserves special attention as A.I. enables companies to intrude ever more into our psyches. Indeed, advertising is one area in which A.I. has already provided a boost. According to a recent industry report, global ad revenue “excluding U.S. political advertising” grew by an estimated 8.8% to reach $1.14 trillion in 2025. The report attributes this “remarkable resilience” to “the AI investment boom.” As another marketing report puts it “AI’s ability to create personalized, efficient, and engaging content” is “making ads the new lifeblood of revenue growth.”
Food companies have joined the vanguard of early A.I. adopters seeking to tap into this “new lifeblood.” This has led to some cringeworthy missteps, like a Dutch A.I.-generated commercial suggesting we might all take refuge in a McDonald’s amidst a dystopian holiday season. But by and large, food companies and their digital marketing agencies—which are increasingly embedded “in-house”—are not dumb. And their success should concern us.
As tech critics have long pointed out, platforms like Google and Facebook do not sell advertisements so much as the promise of manipulating their users’ behavior. They deliver on this promise by sucking up massive amounts of data about everything we do and deploying algorithms to incessantly nudge us towards the desired—profit-generating—behavior. Many of the algorithms’ tricks may be familiar. Brick and mortar food retailers like Starbucks, for example, have long employed the “decoy effect” to upsize orders by presenting customers with an additional, slightly less attractive option (e.g the “grande” coffee with nearly the same price tag as the larger “venti”). In the digital context, however, marketers have nearly unlimited potential for “twiddling,” or continually adjusting parameters for the sake of bigger profits, to the detriment of even the most careful and informed consumers.
CFA member Consumer Reports recently revealed how the food delivery app Instacart engages in twiddling to charge customers as much as 23% more for identical products. After buying the AI company Eversight in 2022, Instacart began offering its food retailer partners “optimization” software which it claimed could boost the grocers’ profit margins by 2 to 5 percent, according to CR’s report. Popular outrage has led Instacart to abandon it’s differential pricing scheme, for now. But the news offers a disturbing glimpse into the future that may await us should public policy leave corporate tech and food giants to their own devices.
A.I. manipulation takes a particularly sinister turn as applied to our diets, because eating a healthy diet does not generate a lot of food industry profits. Rather, ultra-processed foods do. UPFs accounted for over half of $2.9 trillion in shareholder payouts by all publicly listed food companies since 1962, according to one recent estimate. That’s because selling long-lasting, hyperpalatable formulations of cheap industrial ingredients makes more money for shareholders than selling real food. And that’s bad news for consumers. We may have every intention of avoiding added sugar, eating 5 cups of fruits and veggies per day, and meeting all of the other federal dietary guidelines. But marketers’ “innovations” will do whatever they can to drive us towards more profitable UPFs.
These foods, or food products, have been rightly vilified by the Trump Administration’s MAHA Commission. As that Commission pointed out, children bear the brunt of our ultra profit-driven food system’s assault on public health. Researchers in the U.S. and around the globe have documented how food advertising degrades children’s diets. Their studies find “significant associations between food marketing exposure (via digital media, television, or food packaging) and increased immediate intake in children, as well as altered food choices and preferences in favor of unhealthy, marketed foods.” The evidence is so strong that it led the MAHA Commission to pledge to “explore” restrictions on junk food advertising to kids.
But whether this “exploration” leads to a ban or some other substantive policy remains to be seen. The Administration’s overwhelmingly deregulatory actions so far suggest food marketing executives need not panic. To make matters worse, the Trump Administration has taken an aggressive posture towards the state and foreign governments that have sought to protect consumers from A.I.’s worst excesses. Earlier this month, it issued a patently unlawful “preemption” of state A.I. consumer protection laws via Executive Order, which purports to formalize tech companies’ authority to police themselves, since neither Congress nor the White House have signaled any intention to reign in the companies.
In the international sphere, the situation is more fraught. The Administration has used trade negotiations and the threat of tariffs to bully our closest allies into abandoning their efforts to hold tech companies accountable. In the words of Nobel-prize winning economist Paul Krugman, the U.S. has become “a Digital Narco-State.” After nearly a year of craven self-dealing, the Administration’s perfidy comes as no surprise. But a bill introduced by two Democratic senators, which would give the President more authority to undercut trading partners’ efforts to protect consumers from the broligarchy, makes clear that the problem cuts across party lines.
The instinct to protect America’s tech sector at all costs may seem reasonable. In the short-term, this strategy may help to prop up the stock market, and the K-shaped economy it has fueled. But not all economic growth is equal. Letting a narrow industry segment’s short-term profit motives dictate public policy will not end well. Deference to the food industry has led to a public health crisis, and increasingly, a crisis of confidence in the food supply. Consumers deserve better, and they should demand it from federal policymakers.