Why Businesses Are Rethinking AI Adoption: The Rise of Emotional Contracts

As companies race to adopt AI technology, they are encountering an unexpected challenge: decision-making is not as purely rational as anticipated. Even the most logical enterprise buyers find their subconscious requirements extending far beyond traditional software evaluation standards, highlighting the emergence of “emotional contracts” in the AI procurement process.

A Surprising Revelation

During a consultation with a fashion brand in New York City in late 2024, one AI developer witnessed firsthand how business expectations are evolving. The brand was working on its first AI assistant named Nora—a six-foot-tall digital avatar designed to greet customers, answer questions, and share company news.

While the developer came prepared with a comprehensive checklist covering technical aspects like response accuracy, conversation latency, and facial recognition precision, the client’s concerns took an unexpected turn. Instead of technical performance, they questioned why Nora lacked a personality. “I asked her favorite handbag, and she didn’t give me one!” the client remarked.

This unexpected feedback underscored a fundamental shift in how businesses evaluate AI technology. When an AI assistant closely resembles a human, users naturally judge it by human standards. This phenomenon, known as anthropomorphism, challenges traditional methods of software assessment.

Human-Like Interactions Redefine Expectations

As AI technology becomes more sophisticated and lifelike, users unconsciously blur the line between machine and human. They begin to assess these digital assistants as social beings rather than mere tools. This shift reflects psychological concepts like social presence theory and the uncanny valley effect, where subtle imperfections in human-like avatars can provoke discomfort.

In one instance, a client expressed unease with the avatar’s smile, noting that it showed too many teeth. This reaction aligns with the uncanny valley phenomenon, where almost human-like appearances can feel unsettling. In another case, an aesthetically pleasing yet less functional AI agent received positive feedback purely because of its visual appeal, demonstrating the aesthetic-usability effect—a tendency to favor attractive interfaces over functional accuracy.

The “Perfect AI Baby” Dilemma

Sometimes, businesses become fixated on achieving perfection with AI assistants, delaying project launches indefinitely. One meticulous business owner referred to his creation as the “AI baby,” insisting it had to be flawless before release. This obsession points to a projection of an ideal self onto the AI, where perfection becomes an emotional necessity rather than a practical goal.

The Emotional Contract

What many companies fail to recognize is that signing a contract with an AI vendor is not just a matter of utility and cost reduction but an implicit emotional contract. Businesses subconsciously expect the technology to align with human-like attributes and personality traits. Recognizing this shift can help leaders make more informed decisions and set realistic expectations.

Balancing Rational and Emotional Needs

To successfully navigate the adoption of human-like AI systems, companies should establish robust testing processes that prioritize essential features while acknowledging emotional responses. It is also beneficial to include professionals with psychological expertise to identify subconscious influences on decision-making.

Additionally, maintaining a collaborative relationship with technology vendors can foster mutual understanding. Regular meetings to share insights from user testing can guide vendors in refining their products to meet both functional and emotional expectations.

A New Era of AI Adoption

As human-AI interactions continue to evolve, business leaders must adapt by acknowledging and managing the emotional contracts that shape AI adoption. By balancing rational evaluation with awareness of subconscious expectations, organizations can unlock the potential of human-like AI without falling into the trap of unrealistic demands.

Embracing both the technical and emotional dimensions of AI can position businesses to lead the market while fostering genuine, human-centered innovation.

source- Why businesses judge AI like humans — and what that means for adoption | VentureBeat

disclaimer- This is non-financial/medical advice and made using AI so could be wrong.