Amazon and Walmart face retail media risk from AI shopping agents

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Highlights

Amazon banned Meta's Muse and legally challenged Perplexity's Comet shopping agent, while Walmart launched direct infrastructure support for third-party shopping agents on October 21.
Amazon and Walmart together control 88% of the $74.4 billion U.S. retail media market, but AI agents threaten the value of paid product placements by shifting discovery away from retailer platforms.
Morgan Stanley projects AI shopping agents could enable 10% to 20% of U.S. e-commerce spending by 2030, driving changes in ad formats and prompting retailers like Walmart and Amazon to embed ads in AI tools.

Different platform strategies emerge

As reported by Reuters, Amazon and Walmart are taking notably different approaches to third-party AI shopping agents as the technology starts to move from experimentation toward commercial use. Amazon has blocked Meta's Muse and challenged other agent tools in court, while Walmart launched infrastructure on October 21 to support third-party agentic commerce linked to shoppers' existing accounts.

Amazon said this week that third-party agents should operate openly and respect service providers' decisions on whether to participate. The company banned Muse from its website in September, saying the tool appeared to access its online store without authorization and capture and store customer credentials, while Meta declined to comment.

Amazon also obtained a court order blocking Perplexity's shopping agent Comet in March, but the 9th U.S. Circuit Court of Appeals overturned that ban in August. Amazon says it disagrees with the ruling, and the case remains ongoing.

Walmart is pursuing a more accommodating model. When a shopper uses an agent to browse, Walmart creates a profile for that agent linked to the shopper's Walmart account, allowing consumers to approve purchases or set spending limits.

Advertising revenue model faces longer-term pressure

Amazon and Walmart are the two largest retail media businesses globally, with a combined 88% share of the estimated $74.4 billion U.S. retail media market, based on Emarketer projections cited in the report. That position leaves both companies exposed if AI agents reduce the value of paid product placement on retailer websites and apps by shifting discovery away from traditional digital storefronts.

Morgan Stanley researchers said in July that AI shopping agents could account for 10% to 20% of U.S. e-commerce spending by 2030. Amazon CEO Andy Jassy said last week there is no meaningful effect yet on Amazon advertising from third-party agents, although LSEG data show the company's third-quarter advertising revenue growth of 11% year over year is its slowest pace in nearly four years.

At Walmart, CFO John David Rainey told analysts and investors in August that advertising, including Walmart Connect, together with membership and marketplace operations, accounted for 45% of quarterly operating income growth. Walmart does not separately disclose Walmart Connect figures in its earnings release.

Industry executives and advisers say the shift may change ad formats rather than eliminate the market outright. Walmart has begun testing ads in its Sparky AI shopping chatbot, while Amazon has embedded ads in Alexa for Shopping, suggesting future retail media may rely more on structured product data and query matching than on visual presentation alone.

Morningstar analyst Brett Husslein described the change as an evolution rather than an existential threat for retail media. Emarketer forecasts that brands will spend 22.6% more on retail media in 2026 than last year's $60.7 billion, even as advertisers and consumer goods groups prepare product information for AI agents and reassess how discovery and purchase decisions may shift.

In our earlier article on a KPMG survey of U.S. CEOs, we noted that AI agents are already delivering efficiency and growth gains for many large companies, even if most leaders don’t yet view them as truly transformational. The survey also highlighted continued investment in AI infrastructure and a focus on hiring and retraining, underscoring that wider agent adoption requires process redesign, better data readiness, and stronger technical capability.

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