The rise of AI-led shopping is posing a conundrum for retailers like Walmart and Amazon: how to enable AI agents to shop on their websites without threatening their lucrative advertising revenue and the customer data that fuels it. Retail powerhouses Walmart and Amazon are also the world's two largest retail media businesses, dominating the estimated $74.4 billion in US retail media spending with a combined 88 per cent share of that market, according to projections from data firm Emarketer.
But digital assistants could soon disrupt that business. AI-powered agents that can research and purchase products on consumers' behalf - like Meta Platforms' recently released Muse - could erode the highly profitable business of brands paying retailers to promote products on their websites and apps.
Morgan Stanley researchers said in July these agents could account for 10 per cent to 20 per cent of US e-commerce spending by 2030. Amazon and Walmart are taking different approaches to agentic AI shopping.
Amazon has blocked Muse, while Walmart is officially partnering with Meta Platforms' agentic tool. So far, there is no meaningful effect yet on Amazon ads; however, the company's 11 per cent year-over-year (YoY) growth in advertising revenue for the third quarter was its slowest pace of growth in nearly four years, LSEG data show.
The segment consistently accounts for about 10 per cent of total net sales. Amazon banned Muse from its website in September, saying it appeared to have accessed its online store without authorisation, capturing and storing customer credentials.
Meta Platforms declined to comment. Amazon also won a court order blocking Perplexity's shopping agent Comet in March, though the 9th US Circuit Court of Appeals overturned the ban in August, a decision Amazon said it disagreed with.
The case is ongoing. Walmart, conversely, rolled out infrastructure on 21 October to enable AI shopping.
When a shopper uses an agent to browse, Walmart will create a profile for that agent that links to the shopper's Walmart account. Consumers can approve purchases or set spending limits.
Walmart CFO John David Rainey told analysts and investors in August that advertising, which includes the Walmart Connect retail media business, along with its membership and marketplace operations, accounted for 45 per cent of quarterly operating income growth. Dan Marc, CEO of retail media platform Footprints AI, said he expects companies like Amazon and Walmart to start signing their largest advertisers to multiyear ad deals to secure those revenues.
Morningstar analyst Brett Husslein said the moment presents "an evolution rather than an existential threat" for retail media. Brands are expected to spend 22.6 per cent more on retail media in 2026 than last year's $60.7 billion, Emarketer forecasts show.
Advertising for bots may rely less on visual flair and more on specific product data that matches customer queries using AI chatbots.