Amazon.com has long been the first stop for many online shoppers, but Meta Platforms just built a new one.
In September, the social-media company behind Instagram rolled out its personal AI agent, dubbed Muse. The animated personal shopper that can also complete tasks like booking travel and making budgets has exploded in popularity. More than 10 million people in the U.S. and Canada set up Muse agents in its first month and a half, the company said.
Muse is also a growing nuisance for Amazon, the largest company in the U.S. by annual revenue and its second-largest retailer. The threat lies in Muse's potential to undermine one of Amazon's most lucrative businesses: advertising.
Amazon is a digital ad giant, lagging only behind Alphabet's Google and Meta, with nearly $70 billion in ad revenue last year. A big chunk of that comes from charging companies to place sponsored ads in front of Amazon shoppers.
Muse could disrupt Amazon's model by finding and buying products, effectively bypassing the human browsing experience. Artificial-intelligence agents evaluate product details and prices to determine what to buy rather than taking in advertising that can sway humans. If AI agents increasingly make purchases, brands may have less incentive to pay Amazon for ads that no longer influence what consumers buy.
Amazon blocked Muse from shopping on its site shortly after its launch, citing safety concerns. But rivals Walmart and Shopify have embraced Muse and cut deals with Meta.
Muse "has the potential to become the most widely used consumer AI application since ChatGPT," JPMorgan analysts said in a note.
On Thursday, Amazon Chief Executive Andy Jassy weighed in, dismissing concerns about AI agents while also talking up Amazon's own Alexa for Shopping, the company's AI assistant that can research and compare products, track deals and offer personalized gift recommendations.
Alexa for Shopping, he told investors on the company's earnings call, "is going to be the primary shopping agent customers use to shop Amazon." It has been used by over 400 million people in the last 12 months, he said.
As for other, outside AI agents, "few customers are doing much shopping this way yet, as the experience is still not great, nor more convenient than coming to a retailer directly to research or one-click order there," Jassy said on the call.
Amazon's ads business hasn't yet been meaningfully affected, he said.
The company, which touts its focus on "customer obsession," is now tasked with determining how it will work with AI agents that are rewriting the rules of online shopping without ceding its status as a first stop for customers.
The rise of Muse and other agents threatens Amazon's position, said Guru Hariharan, a former Amazon manager who founded CommerceIQ, which helps consumer brands grow sales with AI agents.
"Amazon has always been the front door of shopping," Hariharan said. "For the first time, it's at risk of not being the only one."
High-profile spectators are flirting with the idea that Amazon's ban on Muse or other shopping agents could make it vulnerable.
"Amazon banning agents is the first opportunity I've seen since Amazon was founded for a startup to create an Amazon competitor," longtime Silicon Valley investor Paul Graham wrote on X. "People will want agents to buy stuff for them. It will be one of the main use cases. And they won't want to use some Amazon-supplied agent to do it."
Elon Musk, whose AI-powered Grok Bot is also blocked from shopping on Amazon, has also weighed in on X: "Maybe we should start a competitor to Amazon."
Despite Muse and other agents' ability to discover products in new ways, Amazon's business model could be tough to disrupt. Daniel Flax, an analyst at Neuberger, said he is bullish about the company's ability to adapt to an AI landscape.
"If you think about the history of Amazon, they've been very effective at trying to deliver a lot of value to customers and constantly raising the bar," Flax said, citing fast delivery as an example. "I would expect Amazon to effectively adjust to an environment where agents become more impactful on the retail experience."
Amazon recently said its Shop Direct feature, which allows customers to find products from other stores, now includes more than 250 million products. Its Buy For Me feature lets users purchase some of those items from other merchants, but without leaving Amazon's site.
"Maybe they don't want to tip their hand, but I think Amazon's just being territorial and rightly so, because I think they are going to make their own play for control of agentic commerce," said Chris McCabe, a former Amazon employee who now owns ecommerceChris, a consulting firm to online sellers who helps them liaise with Amazon.
Could Amazon cut a deal with Muse? The company has said it is in talks with a range of AI assistants and agents for potential shopping experiences. On Thursday, Jassy entertained the possibility, saying Amazon anticipates "working with horizontal agents."
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