Walmart is ramping up its efforts in artificial intelligence and agentic technologies for its advertising platform, positioning itself as a formidable competitor to Amazon. On Tuesday, Walmart executives announced plans to integrate advertisements into Sparky, its AI shopping assistant, while also offering generative AI-driven insights and creative options for advertisers. Additionally, the company is beta testing Marty, an agentic advertising assistant aimed at optimizing billing and bidding for sponsored search campaigns, with a broader rollout expected later this year.
These initiatives follow last year’s experiments with Sparky and Marty, reflecting a strategic shift in the retail media landscape towards AI-capable tools. As noted by commerce executives, this move mirrors Amazon’s ad strategy, which includes its own AI assistant, Rufus, that began displaying ads in 2024. At the unBoxed conference last year, Amazon unveiled a suite of AI tools designed to streamline campaign creation, targeting recommendations, and query construction using natural language.
The increasing reliance on AI chatbots for shopping reflects a broader trend, with both Walmart and Amazon competing to capture the attention of consumers. Mike O’Donnell, senior vice president of innovation at Flywheel, noted that integrated personalized and conversational shopping experiences are likely to become the new standard among consumers. This evolution is backed by data from Walmart, which indicates that 81% of customers would consider using Sparky to check product availability and explore product details before making a purchase.
The agentic AI playbook
Walmart has also forged a partnership with OpenAI, allowing customers to shop using ChatGPT, further integrating AI into the shopping experience. “Our goal with AI isn’t just innovation for its own sake; it’s about delivering real advertiser value at every level,” stated Khurrum Malik, vice president of business and product marketing at Walmart Connect, emphasizing the importance of meaningful engagement for advertisers.
This anticipated rivalry between Walmart’s Sparky and Amazon’s Rufus positions them as the leading players in the next phase of retail media, where both companies are striving for scale. With Walmart’s ad business already generating significant revenue, reporting $4.4 billion for Walmart Connect in 2024 and a 53% growth in its global ad business in the third quarter of 2025, the stakes are high.
In comparison, Amazon’s advertising revenue grew 24% year-over-year to $17.7 billion in the same period. “What Walmart uniquely brings to AI-first retail media…comes back to their scale of first-party retail data and closed-loop measurement,” explained Mike Feldman, senior vice president of commerce at Flywheel, highlighting Walmart’s competitive edge in data utilization.
Experts suggest that Walmart has reached parity with Amazon in the retail media space, positioning the two giants as the primary players, with other competitors lagging behind. Ross Walker, director of retail media at Acadia, expressed optimism about Walmart’s future, stating that its media business could rival Amazon’s within the next three to four years. Another commerce executive succinctly summarized the competitive landscape, stating, “It’s Amazon. It’s Walmart. They’re the 800-pound gorillas in the room. And then, you’ve got everybody else.”
The race to dominate the retail media market through AI technology not only reflects the evolving landscape of e-commerce but also signifies a fundamental shift in how consumers engage with brands. As Walmart and Amazon continue to innovate, the impact on advertising strategies and consumer behavior is likely to be profound, shaping the future of retail in the age of artificial intelligence.
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