Amazon faces a dilemma – fight AI shopping agents or join them?

Amazon CEO Andy Jassy understood how artificial intelligence was dramatically changing e-commerce.

In June, he told employees that AI agents would begin infiltrating many aspects of their daily lives, “from shopping to travel to everyday household chores and work.”

Four months later, Jassy said on an earnings call that Amazon planned to partner with third-party agencies and was in talks with some providers, but he declined to name them.

According to a recent job listing, Amazon is currently looking to hire an enterprise development leader to help build strategic partnerships in areas including “agency commerce.”

Amazon’s rapid evolution into AI-powered commerce highlights how rapidly online retail is changing and the risks the company faces if it doesn’t act proactively to maintain control of its future.

The company focuses on OpenAI, googlepuzzled and microsoft In recent months, the company has released a flurry of e-commerce agents aimed at changing the way people shop. Instead of visiting Amazon, walmart or nike Directly, consumers can rely on AI agents to do the heavy lifting of scanning the web to find the best deals and perfect products, and then make purchases without leaving the chatbot window.

The first AI-powered shopping agent was released about a year ago. Consulting firm McKinsey has predicted that agent commerce could add $1 trillion to U.S. retail revenue by 2030.

This is a trend that threatens Amazon’s profits and relationships with customers. For example, when a consumer initiates a purchase using ChatGPT, OpenAI collects a “small fee” from each transaction.

“By using ChatGPT’s agents, retailers risk abandoning transactions on their site and paying someone else’s highway toll on the same transaction,” Forrester retail analyst Sucharita Kodali said in an interview.

Some companies are trying to find a middle ground between partnering with agent providers and competing with them. walmart, Shopify Companies such as have adopted a frenemy strategy, continuing to develop their own tools and announcing partnerships with AI companies while setting guardrails on how agents access their sites.

Shopify CEO Tobi Lutke said in a post on X on Tuesday that the company is “building every layer of infrastructure to power a new Cambrian explosion of creativity in shopping.”

“I’m really excited about Agentic Commerce,” Lutke wrote. “There’s a lot of great stuff being made. Everything I’ve tested is fun and feels right.”

Amazon has so far taken defensive measures.

The company recently updated its website’s underlying code to block external AI agents from crawling the website, as part of an effort to keep valuable training data from rivals. As of Tuesday, Amazon had blocked 47 bots, including bots from all major AI companies, according to the company’s website.

Amazon took the issue to court. Amazon sued Perplexity in November over the agents in its Comet browser that can be purchased on behalf of users. The company claimed that Perplexity took steps to “hidden” the agency so it could continue to scrape Amazon’s website without authorization.

Perplexity called the lawsuit a “bullying tactic.”

Amazon, on the other hand, is investing heavily in its own AI products. The company launched a shopping chatbot called Rufus last February and has been testing an agent called Buy For Me that lets Amazon buy products directly from other sites on its e-commerce app.

Morgan Stanley predicts that nearly half of U.S. shoppers will use AI agents by 2030, and that the technology could drive U.S. e-commerce spending to as much as $115 billion.

“We believe agent commerce, the ability to have a personal digital interactive shopper, will be the next best practical GenAI-enabled unlock,” Morgan Stanley analysts said in a November report.

They noted that the percentage of consumers starting their “purchase journey” through AI is currently in the mid-single digits, but could increase over time as approximately 40% to 50% of Americans currently use AI for product research.

Traffic from AI chatbots to US retail sites has surged in recent months, especially during the holiday season, but research shows that Google Search still performs better in terms of conversion rates and revenue per session.

AI-powered shopping is still in its infancy.

OpenAI’s instant checkout tool, released on ChatGPT in September, is only available on select products sold by Walmart. Shopify, target and Etsy. Users can only purchase one item at a time and cannot connect to loyalty memberships like Walmart+.

Agents are also prone to problems.

Scott Wingo, founder of e-commerce software startup ReFiBuy, recently tested Perplexity’s Instant Buy tool, which allows users to buy products directly from a search engine.

Wingo tried to buy a cable knit sweater Abercrombie & Fitchbut Perplexity’s distributor repeatedly spewed out error messages even though both products were in stock on the retailer’s website. He eventually gave up.

Earlier this month, Wingo was searching for coffee machines on ChatGPT and the Breville espresso maker was suggested. When I clicked on the product, I was surprised to see an image of a garden rake.

“These crawlers go out and ingest data, but we don’t know exactly what they’re going to get,” Wingo said.

Amazon is considering its next move with shopping agents, quietly giving them access to some of its facilities.

Subsidiaries such as shoe retailer Zappos, fashion site Shopbop, and sale site Woot do not appear to include language blocking agents in their robots.txt files, which determine how crawlers access certain web pages.

“In many cases, they will use subsidiaries for experiments,” Wingo said. “Zappos has its own experience and database, so we’re not kicking every horse out of the barn.”

If the company decides to give agents access to its main e-commerce platform, it could ultimately lose ground to rivals. Shopify and Walmart have set boundaries on what outside shopping agents can and cannot do on their sites.

Wingo said that while Amazon may intend to give distributors access to its catalog, it likely wants to protect more valuable data from competitors, such as its vast customer reviews and sales rankings, both of which can indicate product quality and help improve the answers of its AI chatbots.

“If I were Amazon, those are probably the two most proprietary data points that I want to protect,” Wingo said.

Amazon isn’t giving up on its own tools.

Since Amazon first launched Rufus last year, its features have improved, and the company is showing chatbots in more areas of its site to encourage user adoption.

Amazon recently added a feature that allows Rufus to automatically purchase items on behalf of Prime shoppers when they reach a certain price. Chatbots now suggest products from sites across the web, not just Amazon.

Amazon also began testing a feature in recent weeks that would allow Rufus to create custom shopping guides, similar to OpenAI’s Shopping Research tool launched last month.

“Amazon is in what I would call a leader’s dilemma rather than an innovator’s dilemma,” said Jordan Burke, founder and CEO of retail consulting firm Tomorrow. “They have the most to lose because their market share is so large.”

See: How Amazon came to dominate the U.S. apparel market