A cartoon personal shopper that never looks at an ad just signed up 10 million people. That's Muse, the AI agent Meta (META) rolled out in September. It finds products, compares prices and buys. It can also book a trip or draw up a budget. Isabella Simonetti and Suzanne Vranica reported the numbers in Monday's Journal, Nov. 2. Amazon (AMZN) is not pleased.
Here's why. Amazon took in nearly $70 billion in ad revenue last year, the Journal says, behind only Google and Meta. Much of that is brands paying to appear in front of you while you browse. A bot doesn't browse. It weighs the specs and the price and clicks. If bots do more of the buying, brands have less reason to pay for the ads. Amazon shut Muse out of its site soon after launch and pointed to safety. Walmart (WMT) and Shopify (SHOP) went the other way and made deals with Meta. JPMorgan's analysts wrote that Muse might end up the most popular consumer AI app since ChatGPT.
Amazon's answer is its own bot. On the earnings call Thursday, Oct. 29, CEO Andy Jassy said few customers shop through outside agents yet, and the experience "is still not great." He talked up Alexa for Shopping instead. More than 400 million people used it in the last 12 months, he said. Amazon's Shop Direct now lists more than 250 million products from other stores. Buy For Me lets you buy them without leaving the site. Jassy also said Amazon expects to work with outside agents in time.
Some doubt the wall holds. Guru Hariharan, who once managed at Amazon, told the Journal that shopping has long started at Amazon's door, and now "it's at risk of not being the only one." Daniel Flax, an analyst at Neuberger, is more relaxed. He expects Amazon to adapt, as it usually has.
Our read
This is a Cash Flow · M5 story for your household, and an Investments/Risk · IN04 story for the portfolio. The portfolio part is easy. Amazon is held at weight in 19 model books and Meta in 20. Nothing added, nothing trimmed. Two of our holdings are fighting over the same front door, and that fight is good for shoppers. The household part matters more. A bot that compares prices may well save you money. But it spends your money to do it, with your card, at its own speed. Convenience is where budgets leak.
Here's the check for your own plan. Whatever shopping agent you've tried, Muse, Alexa, Buy For Me or a one-click button, find out this week which card it's allowed to charge. Give it one card with a modest limit, and turn on a text alert for every purchase. Then look at that card's October statement for buys you don't remember making. That's the bot's bill, and it belongs in your budget like any other line. You fix the leaky tap while it's still a drip.