2025 Year in Review: How AI Transformed Local Business Discovery
From GPT-5 to Gemini 3, 2025 was the year AI assistants became the primary way consumers find local businesses. Here's what changed.
Kevin McCabe
Founder
2025 will be remembered as the year AI search went mainstream. What started as a novelty became the primary way millions of consumers discover local businesses.
Let's look back at the major shifts that defined the year—and what they mean for 2026.
The Big Numbers
- **AI-referred traffic increased 527%** compared to 2024
- **71% of Americans** used AI for purchase research by year-end
- **Traditional search volume dropped 18%** as users shifted to AI
- **AI-referred leads converted 2.3x higher** than organic search
Major Platform Developments
OpenAI: GPT-5 Changed Everything
The release of GPT-5 in mid-2025 brought unprecedented reasoning capabilities. More importantly for businesses, it dramatically improved local recommendations with better location awareness and more nuanced understanding of user intent.
Google: Gemini 3 and AI Mode
Google's Gemini 3 rollout and the introduction of "AI Mode" in Search fundamentally changed how Google results appear. AI-generated summaries now appear above traditional results for most queries.
Anthropic: Claude Goes Enterprise
Claude's enterprise features and Opus 4.5 release made it a serious contender in business recommendations. Its approach to citing sources made it particularly valuable for high-intent queries.
Perplexity: The Dark Horse
Perplexity grew from niche tool to mainstream search alternative. Its real-time web access and citation-first approach made it the platform of choice for research-oriented queries.
What Worked for Businesses
Businesses that thrived in 2025 shared common traits: they optimized for Bing (not just Google), they built strong review profiles, they created comprehensive FAQ content, and they maintained consistent information across platforms.
Looking Ahead to 2026
The shift to AI-first discovery is accelerating. Businesses that haven't started optimizing for AI visibility are now significantly behind. The window to establish AI visibility leadership is narrowing.