The use of immersive technologies has changed the consumption environment in which retailers provide services. We present findings from a study designed to investigate consumer responses toward a $17 million AI-embedded mixed reality (MR) exhibit in a retail/entertainment complex which combines advanced technology entertainment with retail shopping. Findings from our study demonstrate that the quality of AI (i.e., speech recognition and synthesis via machine learning) associated with an augmented object increases MR immersion associated with spatial immersion, MR enjoyment, and consumers’ perceptions of novel experiences. Collectively, these increase consumer engagement, and positively influence behavioral responses—specifically, purchase intentions and intentions to share experiences with social groups. Overall, findings from this study show that interactive AI and MR technology open new avenues to promote consumer engagement.