In a somewhat predictable yet perplexing move, Amazon has sent Perplexity a cease and desist letter. Amazon is demanding (akin to a high maintenance Ex who thinks they still own your pretty little ass) that Perplexity stop its Comet Browser’s Shopping AI Agent from making purchases on behalf of users

Translation – Hey Perplexity. Your Shopping AI Agent which is supposed to make purchases on behalf of users and make their life easier? Well, yeah, it would be great if it stopped doing that.

Why is Amazon scared? Because if AI Agentic eCommerce takes off, then there is no reason for Amazon.com to exist. The back end could be ANY retailer or even just a conglomeration of warehouses and manufacturers.

Bloomberg -> Amazon Demands Perplexity Stop AI Tool From Making Purchases – Bloomberg

What is the Issue? Why is Amazon scared of Big Bad Perplexity and Its Tiny Little Comet Browser?

1. Perplexity has an AI powered browser, Comet
2. Comet is based on Chromium
3. Comet lets users make automatic purchases via an AI eCommerce Agent

Amazon does not want eCommerce to switch from users visiting Amazon.com and deciding what to buy, to

• Shopping AI Agents making the purchase on behalf of customers and the customers never having to visit Amazon.com

Basically, Shopping AI Agents turn Amazon.com into a dumb terminal or an invisible warehouse.

That means -> Amazon.com can be replaced by ANY online retailer.

If Shopping AI Agents become the Shopfront/Storefront/Main User Experience that most/all users see and interact with -> Then there is no longer a need for Amazon.com. There is no user connection with Amazon.com.

Amazon becomes a fungible warehouse. It can just be replaced by a collection of Chinese manufacturers or a group of US warehouses.

Is Amazon in the Right?

No. Not at all. If the user has given Perplexity permission, then Perplexity is 100% in the right to make purchases on behalf of the user.

Exactly how you let your DoorDash or Instacart shopper purchase groceries on your behalf, Perplexity’s Agentic AI Shopper should be able to make purchases on your behalf.

There is absolutely no legal ground for Amazon to stand on. As it is a matter of survival, Amazon will still try to make a legal case.

Why exactly is Amazon sending Perplexity a Cease and Desist letter?

Because it is a Life and Death issue for Amazon.

1. At some level, Amazon makes money due to the presence of inefficiencies and bottlenecks in eCommerce
   • You could go as far as saying Amazon.com exists because of Arbitrage and the Need for Convenience
   • Users are too lazy so Amazon uses a collection of methods (free shipping, fast shipping, good selection, good customer service, supposed low prices) to make Amazon.com the ‘path of least resistance’ for eCommerece
   • Amazon’s survival depends on both
     • Amazon being the ‘easiest’ option. The Path of Least Resistance
     • Amazon controlling what the user sees
       • This is absolutely critical. In fact, some people would argue that Amazon’s entire ‘Advertising’ business is Amazon showing users the wrong things so the ‘Personalized Ads’ seem a better choice
   • Agentic AI and AI Shopping Agents are easier and more convenient than searching through the reeds at Amazon. That means Amazon.com is no longer the Path of Least Resistance
     • Why spend 15 minutes wading through Ads on Amazon and Fake Reviewed Chinese trash, when you can just have Perplexity’s Shopping AI Agent find you what you need
     • Why go to Amazon.com at all, if the Perplexity Shopping AI Agent buys what you should be buying
   • Amazon.com as it exists, is no longer required
     • We have already seen Shine and Temu and TikTop Shop and Shopify begin to weaken Amazon’s hold on eCommerce
     • Amazon has resorted to heavy lobbying and using the US Government to fight against Temu and Shein
     • Amazon is also using lobbying to try and ban TikTok. It (and other US corporations) succeeded. Then TikTok found its own ‘lobbying’ solution with the US Government
   • Shopping AI Agents are an even bigger existential threat, because users would leave the ENTIRE decision making process to the Shopping AI Agent
     • It would not even be – Is Amazon better or is Temu Better or is Shein better or is Tik Top Shops better?
     • Users would leave EVERYTHING to the Shopping AI Agent and the company which controls the Shopping AI Agent now controls Amazon’s bloated and advertising riddled ass
2. By creating a platform which is approximately 51% of ecommerce purchases in the US, Amazon gets a few benefits
   • Tremendous power
   • Economies of scale
   • Able to get advertising revenue by ‘selling’ shelf space
     • It kills the user experience so that ‘Personalized Ads’ are better than organic search results
     • Killing its own long term future to build this ‘Advertising Service’
   • Introducing its own products (such as Amazon basics)
   • Taking a cut of retailers’ and dropsellers’ sales
   • Cross Marketing
   • Growing Amazon’s customer base
   • Control of what customers see
3. If purchasing shifts from customers going to Amazon.com, to customers letting Agentic AI make purchases, all the power and control and money shifts
   • Firstly, customers will switch to using Shopping Agents as the Starting Point
     • In theory, at some point of time in the future, these Shopping Agents could just switch out Amazon and replace it with another ecommerce retailer, or even their own estore
   • Secondly, it becomes almost impossible for Amazon to sell advertising space
     • Amazon does not control what the user sees, when Shopping AI Agents are involved
       • In many use case scenarios, the Shopping AI Agent is making the decision. So customers are seeing ‘nothing’
     • Amazon cannot sell ‘Shelf Space’ as ‘Advertising’ as the new Shelf Space is controlled by the Shopping AI Agent and by the company which owns the Shopping AI Agent
     • Efficiency of Shopping AI Agents, in theory, means there is far less ‘shelf space’ available.
     • As Shopping AI Agents get better and better – there will be no ‘advertising space’ at all

We are living in truly interesting times

Anyone who makes a truly efficient Shopping AI Agent completely wipes out Amazon’s retail division and eBay and most other retailers

What is the risk to Amazon if some/all of eCommerce shifts to Agentic Commerce?

Amazon.com becomes a dumb terminal.

Amazon is no longer required, at all.

Will people trust Shopping AI Agents? Will people switch over to Agentic eCommerce?

People will do anything to save time and to avoid working and to save mental bandwidth.

Ask yourself this question – When is the last time you were delighted by your shopping experience at Amazon?

For many people it has been over a decade. For some people many years. There is almost no one anywhere saying – I loved my Amazon.com shopping experience.

People are EAGER and WILLING to hand over eCommerce shopping for most purchases to a Shopping AI Agent that will save them time and effort.

Most purchase decisions fall into

1. Necessities – Users derive very little pleasure from the shopping experience of buying necessities
2. Luxuries – Users probably greatly enjoy these shopping experiences and will continue to indulge in these manually. Perhaps in the real world. Perhaps online
3. One-off Purchases that are important but not pleasurable – Users, again, derive very little pleasure from these shopping experiences

The 1st and 3rd categories of purchases are categories of purchases where users will very gladly hand off The Entire Shopping Experience to a Shopping AI Agent

For Amazon that means – Bye Bye Love. Bye Bye Happiness. Hello Loneliness. I think I’m going to die.

Here is why the rise of Shopping AI Agents completely screws Amazon and will lead to Amazon being left behind in eCommerce

Firstly, most users will just let the Shopping AI Agent buy from ANYWHERE. This will happen sooner rather than later. People greatly underestimate how weak Amazon’s hold on customers has become over the last decade.

The self-inflicted wound of killing the user experience of shopping at Amazon – ostensibly, to grow an ‘Advertising’ business – has made most people deeply unhappy. That is why Temu and Shein and Tik Tok Shop are taking so much market share.

With better Shopping AI Agents – Amazon is no longer involved and the purchase happens from a retailer in China or a distributer in China or a warehouse in America. No revenue for Amazon.

Secondly, even when the Shopping AI Agent chooses Amazon.com, or if the user specifies Amazon.com as the retailer to purchase from -> There is no ‘Advertising Space’ Amazon can leverage. The user is not seeing anything. So Amazon cannot show the user Ads. Amazon cannot route users to the products it makes the higher margins on. Amazon cannot show ‘Personalized Ads’ instead of the best products.

It is now the Shopping AI Agent that controls EVERYTHING

Why is Everyone missing the Aspects of Control and Power and Revenue? Why is Everyone missing that Shopping AI Agents will turn Amazon into a dumb terminal and then replace it with a non Amazon owned Dumb Terminal?

Because the money from Amazon Web Services has allowed Amazon to paper over the cracks of just how terrible a shopping experience Amazon.com has become.

Shopping at Amazon is now navigating through ‘sponsored ads’ and all types of terrible drop shipped products. Hoping you will run into an actual high quality product. Reviews are compromised. Search Rankings on Amazon.com are compromised (amusingly by Amazon itself, to grow its ‘Advertising’ business).

Will Agentic AI Commerce actually take off?

Yes. 100%

As opposed to most of AI/Machine Learning, which is overhyped, Agentic ECommerence is underhyped.

Most people are dying for an easier and more efficient way to shop.

The large platforms have compromised their platforms in the pursuit of profit.

The number and percentage of terrible search results on Google is shocking. Google must pollute its organic search results so that people prefer to click on the Ads.

The number and percentage of abysmally bad shopping search results on Amazon is astounding. Amazon must pollute its search organic results so that people prefer the ‘Personalized Ads’ and inferior products with higher profit margins.

It is not unusual for users to waste 50% to 90% of their ‘search’ time.

Google and Amazon and other platforms make most of their money from advertising and it is in their best interest to make Organic Search Results terrible, so that users are forced to turn to the Sponsored Ads

Anything which either

1. Makes the shopping process more efficient

Or

1. Bypasses Amazon.com and Google.com and takes users straight to the best results and the best products

Is poison for both Google and Amazon’s advertising business and for their sites/platforms themselves.

This is one of the most interesting areas in AI and there is an incredible amount of money at stake. This is one of the few areas where AI companies do not have to ‘create’ a market, or hope one magically materializes.

By cannibalizing and prostituting their Platforms, Google and Amazon have laid out a red carpet for Efficient, Fast, Easy to Use Shopping AI Agents to take over eCommerce and Shopping and completely bypass Amazon and Google.

Once we have very good Shopping AI Agents, there is no need for a shopping platform like Amazon.com. Nor do we have a need for a search engine like Google.

If you had a shopping agent, Claire, and she made good smart decisions for you, you would NEVER need to use Amazon.com. Even 15 minutes saved per shopping search is a lot of money saved. A lot of frustration avoided.

The ‘Killer App’ of AI might be right in front of our noses.