Amazon and Walmart have spent years turning online shopping into a powerful advertising business. Now, artificial intelligence could disrupt the very shopping habits that made those advertising operations so profitable.
The growing adoption of AI shopping agents is creating an uncomfortable situation for major retailers. These digital assistants can search for products, compare prices and complete purchases on behalf of consumers, potentially reducing the need to browse traditional shopping websites.
That matters because sponsored product listings generate substantial revenue for both companies.
According to Reuters, Amazon and Walmart collectively account for approximately 88% of the projected $74.4 billion US retail media advertising market in 2026, based on estimates from Emarketer.
The concern is straightforward. If customers allow AI assistants to handle purchasing decisions, they may never see the advertisements that retailers charge brands to display.
AI Shopping Agents Could Disrupt Traditional Online Advertising
Online retailers have built their advertising businesses around customer browsing behavior. Shoppers searching for electronics, clothing or household products regularly encounter sponsored listings placed alongside organic search results.
Brands pay for those placements because they reach consumers who are already considering a purchase.
AI shopping agents could change that relationship. Instead of scrolling through product listings, consumers can simply tell an assistant what they want, specify a budget and receive recommendations based on their preferences.
Some agents can even complete transactions automatically, removing several steps from the conventional shopping experience.
Morgan Stanley researchers estimated in July that AI shopping agents could account for between 10% and 20% of US e-commerce spending by 2030.
For retailers, that projection raises questions about how advertising will work when software increasingly influences purchasing decisions.
A sponsored product displayed prominently on a website becomes less valuable when the customer never visits the page.
Amazon Pushes Back Against Third-Party AI Shopping Agents
Amazon has adopted a cautious approach toward outside AI shopping assistants, particularly those accessing its marketplace without authorization.
In September, the company blocked Meta’s Muse shopping agent, alleging that the tool had accessed Amazon’s online store without permission and collected customer credentials.
Amazon has also challenged Perplexity’s Comet shopping agent through legal proceedings. The company secured a court order restricting Comet in March, although a US appeals court overturned that restriction in August. The dispute remains unresolved.
The company maintains that third-party AI agents should operate transparently and respect retailers’ decisions about whether to participate.
There is a significant commercial consideration behind that position.
Amazon’s advertising operation depends on shoppers interacting with its marketplace. Customer searches, browsing patterns and purchasing activity help brands target advertisements and measure campaign performance.
Allowing outside AI systems to control more of that process could weaken Amazon’s direct relationship with consumers.
Amazon CEO Andy Jassy recently said third-party shopping agents had not produced a meaningful impact on the company’s advertising business.
Still, Amazon reported advertising revenue growth of 11% year over year during the third quarter of 2026, its slowest growth rate in nearly four years, according to LSEG data cited by Reuters.
That slowdown cannot be directly attributed to AI shopping agents, but it comes at a time when the future of retail advertising is becoming increasingly uncertain.
Walmart Takes a Different Approach to AI-Powered Shopping
Walmart appears more willing to embrace outside AI shopping platforms.
On October 21, the retailer introduced infrastructure designed to allow third-party AI agents to interact with its shopping systems and complete purchases on behalf of customers.
The initiative includes Agent Profiles, a feature that links authorized shopping assistants to individual Walmart accounts.
Customers will be able to monitor transactions, establish spending limits and require approval before an AI assistant completes a purchase.
Walmart also introduced its Agent Gateway, which enables compatible AI assistants to connect directly with Walmart and Sam’s Club systems.
The strategy allows Walmart to participate in automated shopping while maintaining some control over customer accounts and purchasing activity.
Advertising remains an important part of its business.
Walmart Chief Financial Officer John David Rainey said in August that advertising, membership and marketplace operations collectively accounted for 45% of quarterly operating income growth.
That figure does not represent advertising alone, but it highlights the importance of Walmart’s higher-margin digital businesses.
By welcoming AI shopping agents, Walmart is betting that adapting to changing consumer behavior will prove more valuable than trying to keep automated assistants outside its marketplace.
Retail Advertising Spending Continues to Grow Despite AI Concerns
Despite the uncertainty surrounding automated shopping, retail advertising remains a growing industry.
Emarketer projects that US retail media spending will increase by 22.6% in 2026, compared with approximately $60.7 billion the previous year.
Major consumer brands continue investing in retail advertising because sponsored listings reach shoppers close to making purchasing decisions.
That advantage has not disappeared.
Morningstar analyst Brett Husslein views the rise of AI shopping as an evolution of retail media rather than an immediate threat to its existence.
The distinction matters. AI agents may eventually change how advertising works, but conventional e-commerce platforms still attract enormous numbers of shoppers.
Retailers are also experimenting with ways to bring advertising into AI-powered shopping experiences.
Amazon has incorporated advertisements into its Alexa for Shopping assistant, while Walmart has started testing advertising within Sparky, its AI shopping chatbot.
These experiments suggest that retailers are not preparing to abandon advertising. They are looking for ways to preserve it as shopping moves into conversational interfaces.
Brands May Need to Optimize Products for AI Recommendations
The emergence of AI shopping agents could also change how consumer brands compete for visibility.
Traditional retail advertising often rewards companies that pay for prominent placements in search results or product recommendation sections.
AI shopping introduces another consideration: whether a product’s information is detailed and reliable enough for an automated assistant to recommend it.
Product specifications, pricing, availability and customer preferences could carry greater weight when AI systems evaluate competing options.
Companies including Procter & Gamble, Nestlé and L’Oréal are already working to make their product information easier for AI systems to understand.
The shift could encourage brands to invest more heavily in structured product data rather than relying exclusively on conventional advertising campaigns.
A customer asking an AI assistant to find an affordable laptop, for example, may receive a recommendation based on performance, price and intended use without ever viewing a sponsored product listing.
That creates a different kind of competition.
Brands will still need to persuade consumers that their products offer value, but they may also need to ensure AI systems can accurately identify and evaluate those products.
AI Shopping Could Force Retailers to Rethink Advertising Contracts
The financial implications extend beyond product discovery.
Retail media companies may eventually need to reconsider how they price advertising and negotiate agreements with major brands.
Dan Marc, CEO of retail media platform Footprints AI, expects large retailers to pursue longer advertising contracts with major advertisers as they attempt to secure revenue.
He also anticipates potential discounts on digital retail advertising as more shoppers turn to AI assistants and large language models.
Such changes would reflect a shift in the value advertisers receive from traditional retail placements.
If automated shopping reduces the number of consumers browsing sponsored listings, advertisers may become less willing to pay existing rates.
Retailers could respond by introducing new advertising formats designed specifically for AI-assisted shopping.
Those formats might emphasize product relevance, availability or personalized recommendations rather than traditional display advertisements.
For now, the industry is still experimenting with what those models could look like.
AI Agents Could Eventually Change How Retailers Compete for Sales
One possibility is that retail advertising becomes closely connected to automated pricing and product selection.
Katherine Black, a senior consultant at Kearney, has suggested that retail media could eventually develop into a bidding environment where AI agents search for products within a customer’s budget while retailers adjust their offers.
Such a system would look considerably different from today’s sponsored search results.
Instead of competing primarily for visual placement, retailers could compete to satisfy the requirements of AI systems acting on behalf of shoppers.
That could place additional pressure on pricing, inventory accuracy and product information.
It could also create new questions about transparency.
Consumers may want to know whether an AI assistant recommended a product because it genuinely matched their preferences or because a retailer paid for preferential treatment.
Those questions will become more important if AI agents begin handling a larger share of online purchases.
The Future of E-Commerce Advertising Depends on Who Controls the Shopping Experience
Amazon and Walmart are approaching AI shopping from different directions, but both face a similar challenge.
Amazon is protecting access to its marketplace while developing its own AI shopping capabilities. Walmart is opening its systems to third-party assistants in an effort to remain connected to consumers as purchasing habits evolve.
Neither approach eliminates the uncertainty surrounding retail advertising.
For brands, the immediate priority is understanding how AI-powered product discovery could influence purchasing decisions without abandoning advertising channels that continue to deliver results.
For retailers, the challenge is more complicated.
They need to make shopping easier while protecting the advertising revenue and customer relationships that support their businesses.
AI shopping agents are unlikely to replace traditional online shopping overnight. Consumers still browse websites, compare products and make purchases directly through familiar platforms.
But the long-term implications are difficult to ignore.
If AI assistants become the primary way people discover and purchase products, the most valuable position in online retail may no longer be the top sponsored listing.
It could be the recommendation an AI agent makes before the customer ever opens a shopping website.
Sources
- Reuters – November 4, 2026: AI Shopping Agents Could Threaten Amazon and Walmart’s Ad Business
- Reuters – October 21, 2026: Walmart Launches Tools for AI Agents to Shop for Customers
- Reuters – August 7, 2026: Retailers Tap AI Shopping Traffic but Fight to Keep Customer Data
- MarketScreener – November 4, 2026: AI Shopping Agents Could Threaten Amazon and Walmart’s Ad Business
