Could Meta’s AI Shopping Assistant Muse Threaten Amazon’s Nearly $70 Billion Advertising Business as It Explores E-Commerce?

Amazon’s dominance in online shopping and its nearly $70 billion advertising business face a potential challenge from Muse, the new artificial intelligence shopping assistant from Meta Platforms.

Following its September launch, Muse enables consumers to deploy AI agents for product research, purchases and tasks including travel bookings and budget management. According to Meta, more than 10 million users across the United States and Canada created Muse agents within the first six weeks of launch. The stakes for investors go beyond retail sales. Sponsored product placements are central to Amazon’s advertising business, influencing shoppers as they browse its platform. With AI agents able to compare prices and choose products independently, those advertisements could lose effectiveness, potentially weakening one of Amazon’s most profitable sources of revenue.

Citing security concerns, Amazon has responded to this shift by preventing Muse from completing purchases on its platform. Walmart and Shopify, by contrast, have partnered with Meta to adopt AI-driven shopping.

During an earnings call, Amazon CEO Andy Jassy played down the near-term threat, arguing that purchasing directly from retailers remains more convenient than using third-party shopping agents. Amazon’s advertising business, he said, had yet to see any material impact. Turning to Amazon’s own offering, Jassy pointed to Alexa for Shopping, which helps consumers compare products, track prices and obtain personalised recommendations. The assistant has drawn more than 400 million users over the past year, he said.

Despite that assessment, industry observers caution that AI agents could erode Amazon’s longstanding status as consumers’ first choice when starting an online shopping journey. In JPMorgan’s view, Muse could develop into a major consumer AI platform, while the restrictions imposed by Amazon could open up opportunities for emerging rivals.

Alongside these developments, Amazon is building its own capabilities in agent-driven commerce. More than 250 million products from external merchants are now covered by its Shop Direct service. Buy For Me, meanwhile, lets customers buy selected third-party products without leaving Amazon’s platform. As shopping habits evolve, Amazon could retain substantial competitive advantages through its extensive fulfilment infrastructure, customer relationships and delivery capabilities.

Market Insight: Can Amazon Strike a Balance?
Partnerships with external AI agents may eventually form part of Amazon’s approach, helping it preserve its dominance in retail. Even so, the company will need to balance the adoption of new shopping technologies with the protection of advertising revenue, which relies heavily on retaining consumers within Amazon’s ecosystem.