Amazon and Walmart's $74 Billion Ad Market Faces an AI Test

What happened

Amazon and Walmart together control an estimated 88% of the U.S. retail media advertising market, which the headline values at $74 Billion. AI shopping agents could change how consumers discover and buy products, potentially reducing exposure to sponsored listings. Walmart permits customer-approved external agents to connect to its platform, while Amazon has restricted some agents.

Confirmed

Global impact / market context

Retailer ads depend on shoppers seeing sponsored products while searching and buying on their platforms. If AI agents increasingly handle those tasks, they could redirect attention and recommendations away from retailer sites, weakening a major profit source and slowing advertising revenue growth for Amazon and Walmart.

Analyst inference

The article presents an emerging business risk, not a reported change already caused by AI agents: Amazon’s CEO said third-party agents had not meaningfully affected advertising. Amazon’s ad revenue grew 11% in the third quarter, its slowest rise in almost four years.

Confirmed

What to watch

1. Whether AI shopping assistants approach Morgan Stanley experts’ estimate of 10% to 20% of U.S. e-commerce spending by 2030, a shift that could move product searches outside retailer platforms. Analyst inference
2. Whether Amazon changes its restrictions on outside shopping agents, or Walmart’s customer-approved connections lead to meaningful changes in shoppers’ exposure to sponsored products. Analyst inference
3. Whether Amazon’s advertising growth slows further as AI shopping expands; the article identifies advertising growth, consumer connections, and retailers’ influence over recommendations as key signals. Analyst inference

Evidence

• gurufocus.com