AI Shopping Agents Pressure Amazon and Walmart's $74B Ad Business

Ads were built for people, and agents don't look at them

For about ten years, the most profitable part of online retail has been the sponsored listing. A brand pays to appear at the top of a search results page that a person scrolls through. A Reuters analysis published November 4 argues that this model now has a weakness: AI agents that research and buy products for consumers don't need to scroll anywhere.2126

The sums involved are very large. Emarketer projects that US retail media spending will reach about $74.4 billion, and that Amazon and Walmart will take a combined 88% of it.2226 Morgan Stanley researchers estimated in July that agents such as Meta's newly released Muse could handle 10% to 20% of US e-commerce spending by 2030.2127 Finimize put the market logic briefly: retail media is sold through auctions for screen space that people look at, so if agents do more of the browsing, ad prices could fall even while e-commerce keeps growing.30

Perplexity has made this argument for a while. When Amazon first threatened the startup over its Comet browser, Perplexity said Amazon cared more about "serving you ads" than about making shopping easier.1719 In its appeal it told the court that AI agents "don't have eyeballs" to see Amazon's advertising.18 Taken together, the reporting suggests this is the commercial reason Amazon and Walmart are treating agents so differently.

Two retailers, two approaches

All the coverage agrees on the basic split. Amazon has blocked Muse, and Walmart has formally partnered with Meta's agent.2127

Amazon banned Muse in September. It said the agent appeared to have accessed its store without authorization and to have captured and stored customer credentials.21 Meta declined to comment.27 Amazon's public position has hardly changed since it sued Perplexity in November 2025: third-party agents should operate openly and respect a platform's choice about whether to take part.1721

Walmart chose the opposite route. On October 21 it launched infrastructure for third-party agentic commerce. When a shopper sends an agent to browse, Walmart creates a profile for that agent tied to the shopper's own account, and the consumer can approve each purchase or set a spending limit.2729 According to American Bazaar, purchases need customer approval by default, and a beta "Agent Gateway" connects agents through the Model Context Protocol, the open standard for linking AI systems to outside tools.24

The two approaches have more in common than they appear to. Walmart is not letting agents in without conditions. Every agent is tied to an identity Walmart controls, which keeps the customer relationship and the data on Walmart's side. Amazon's demand that agents "operate openly" points the same way. The real disagreement is over whether a retailer can still profit when an agent is the one shopping. Walmart is betting it can by staying in the transaction. Amazon is betting it should decide who gets in at all.

Amazon's position in court is getting weaker

Court rulings have made Amazon's gatekeeping strategy harder to carry out. In March 2026, US District Judge Maxine Chesney issued a preliminary injunction that kept Perplexity's Comet agent out of password-protected areas of Amazon.com. She found that Comet accessed accounts "with the Amazon user's permission, but without authorization by Amazon."11 Outlets give slightly different dates for the order, March 9 or March 10, which probably reflects the gap between when it was signed and when it was reported.1115

The Ninth Circuit reversed the decision. On August 4, a panel led by Judge Milan D. Smith Jr. vacated the injunction. It held that "it is the user who 'accesses' Amazon's computers," and that the assistant is a tool rather than a separate party under the federal anti-hacking law.1215 The court said explicitly that it was not creating "a new legal regime governing agentic AI." Its reasoning depended on Comet running locally on the user's device.12 Amazon asked for rehearing and was refused on September 10.1213

Amazon is now trying a narrower argument. Its amended complaint of September 21 targets the iOS version of Comet. It alleges the app copied authentication cookies to Perplexity's cloud servers, which then accessed Amazon directly from March 18 through at least May 11, 2026.1315 Perplexity has moved to dismiss.15 Our reading is that this is Amazon's strongest remaining argument, because it is aimed directly at the condition the Ninth Circuit left open: what happens when the AI company itself, and not the user's device, touches the retailer's servers.1213 The Muse ban, which Amazon justified on the basis of captured credentials, appears to follow the same reasoning.21

The broader legal picture still points one way. The appellate court with jurisdiction over most of the tech industry has signaled that an agent acting on a user's instructions can stand in for that user.1314

The numbers so far

The coverage gives a mixed picture of how much damage has actually occurred. Andy Jassy said last week that third-party agents have had no meaningful effect on Amazon's advertising so far.22 Yet Amazon's ad revenue grew 11% year over year in the third quarter, which LSEG data show is the slowest rate in almost four years, and advertising consistently makes up about 10% of Amazon's net sales.2226 Amazon reported about $68.6 billion in ad revenue for 2025.18

Nothing in the reporting shows that agents caused the slowdown, and Jassy's statement argues against that conclusion. Still, a slower ad business makes Amazon less willing to risk its most profitable revenue on a shift it cannot control.

Walmart doesn't break out Walmart Connect separately, so less is known there. CFO John David Rainey said in August that advertising, together with membership and marketplace, produced 45% of quarterly operating income growth.2427

Disagreement over how serious the threat is

Observers disagree about the scale of the risk. Morningstar's Brett Husslein called this "an evolution rather than an existential threat." Emarketer forecasts that brands will spend 22.6% more on retail media in 2026 than the $60.7 billion they spent last year.2226 Flywheel's Amie Owen is telling clients not to move budgets "overnight," but to prepare for changes in how products are found and chosen.22

Others expect bigger changes. Dan Marc of Footprints AI predicts that Amazon and Walmart will lock their largest advertisers into multiyear contracts and offer more discounts on retail media.22 Kearney's Katherine Black describes retail media eventually becoming a kind of "bidding system," in which agents look for products at a consumer's price point and retailers set price ceilings and floors.21 Both retailers are also putting ads inside their own assistants. Walmart began testing ads in its Sparky chatbot this year, and Amazon has added them to Alexa for Shopping.26

Brands are adjusting as well. Procter & Gamble, Nestlé and L'Oréal say they are reworking product information so AI agents can process it, and practitioners expect advertising aimed at bots to depend more on structured data than on visual or emotional appeal.2329 Mondelez's Andrew Lederman has said that retailer media sites still account for the large majority of the company's volume.23

On balance, the evidence supports Husslein's view for 2026 and Black's view over the longer term. Ad spending is still rising. But brands, retailers and consultants are all preparing for a world where the buyer is software, and that preparation is already changing how ads are designed and how deals are structured.

Payment networks are building the infrastructure

Payments are what turn this from a discovery problem into a checkout problem. Visa and Mastercard are both replacing card numbers with tokens issued specifically to agents. Visa Intelligent Commerce and Mastercard Agent Pay are the leading consumer checkout systems, though most live transactions in 2026 have been small in scale.3 In June, Visa announced a partnership with OpenAI that would let agents pay with tokenized Visa credentials, limited by spending caps and approvals the user sets.1 As of October, neither company had announced a consumer launch date.7 Shopify has built Visa, Mastercard and American Express agent technology into Shop Pay so buyers can use it at merchants that are not on Shopify. Its product VP said "the agent never sees the buyer's card."10

The rules are also taking shape. Under Visa's rulebook, the cardholder is responsible for an agent's actions as though the cardholder had made the purchase, and issuers may not decline agent transactions wholesale except in narrow circumstances.4 Mastercard's merchant guidance advises rate limiting instead of blanket bot blocking.4 That guidance runs against Amazon's approach and is closer to Walmart's.

Consumers are still hesitant. Visa CEO Ryan McInerney said in September that about three-quarters of consumers don't trust agentic platforms to pay on their own, although that figure reverses when a trusted payment brand is involved.6 OpenAI's first attempt at in-chat checkout was dropped in March after little merchant uptake.27

Outlook

The obstacles agents face in 2026 are consumer trust, slow rollout of payment systems and unsettled liability rules, not legal bans. Each problem is being worked on. When they are solved, the question is who controls the point where the customer's intent becomes a purchase. Walmart's agent profiles and Amazon's lawsuits are two attempts to keep that control. The Ninth Circuit ruling and the payment networks' rules both favor a more open model, which suggests Walmart's strategy has the better chance of holding up.