Meta (META.US) AI shopping assistant Muse tests e-commerce, Amazon (AMZN.US) faces potential impact on nearly $70 billion advertising business

According to Jinse Finance APP, The Wall Street Journal reports that Meta Platforms (META.US) has launched a new artificial intelligence shopping assistant called Muse, which is emerging as a potential threat to Amazon and could challenge the e-commerce giant’s dominance in online shopping as well as its nearly $70 billion advertising business.

Meta launched Muse in September, allowing consumers to use AI agents to research products, complete purchases, and handle tasks such as travel bookings and budget management. Meta stated that within the first six weeks of Muse’s launch, more than 10 million users in the United States and Canada had created Muse agents.

The impact of this competition for investors extends beyond retail sales. Amazon’s advertising business is highly dependent on sponsored product listings, which influence consumers browsing products on its platform. If AI agents are able to independently compare prices and select products, the effectiveness of such ads could be diminished, potentially affecting one of Amazon’s most profitable revenue streams.

In response to this trend, Amazon has blocked Muse from completing purchases on its platform, citing security concerns. Walmart and Shopify, on the other hand, have chosen the opposite approach by partnering with Meta to embrace AI-driven shopping methods.

Amazon CEO Andy Jassy downplayed the immediate threat during Thursday’s earnings call. He believes that third-party shopping agents are still less convenient than consumers purchasing directly from retailers and stated that Amazon’s advertising business has not yet been materially affected. Jassy also highlighted Amazon’s own Alexa for Shopping, saying the assistant helps consumers compare products, monitor prices, and receive personalized recommendations, attracting more than 400 million users over the past year.

Nevertheless, industry observers warn that AI agents could erode Amazon’s longstanding position as the primary starting point for consumers’ online shopping. JPMorgan analysts believe that Muse has the potential to become a significant consumer AI platform, while venture capitalist Paul Graham noted that Amazon’s restrictions may create opportunities for emerging competitors.

Amazon is also developing its own agent-driven commerce capabilities. Its Shop Direct service now covers over 250 million products from external merchants, and Buy For Me allows customers to purchase some third-party products without leaving the Amazon platform. Analysts point out that Amazon’s vast fulfillment infrastructure, customer relationships, and delivery capabilities could still provide significant competitive advantages as it adapts to changing shopping habits. Neuberger analysts remain optimistic about Amazon’s adaptability.

Jassy also stated that Amazon may eventually cooperate with external AI agents. Such collaborations could help maintain its retail dominance, but the company will still need to balance embracing new shopping technologies with protecting its advertising revenue—which largely depends on keeping consumers within the Amazon ecosystem.