[DigitalToday reporter Chi-gyu Hwang (황치규)] AI developers, major retailers and payment service companies targeting AI shopping are moving faster. Rivals appear to be joining hands when needed.

In particular, an unusual alliance among companies taking on Amazon, the world’s largest e-commerce company, is spreading. The idea is that confronting Amazon comes first, so companies are actively pursuing cooperation even with firms that compete with them in certain businesses.

According to The Information, retailers Walmart, Target and Etsy recently partnered with Google, the world’s largest online advertising platform. They decided to sell products through a payment system introduced in Gemini chatbot and AI Mode search results.

Walmart already runs an advertising business at a significant scale and posted more than $4 billion in revenue from advertising alone in the latest fiscal year. Target and Etsy also sell sponsored product promotions on their sites that are effectively advertising. It is an analysis that these moves reflect awareness of Amazon in the AI shopping race.

These companies also sell products through OpenAI’s ChatGPT. Using Walmart as an example, users can search for groceries and daily necessities on ChatGPT and then pay immediately by linking a Walmart account and pressing a “buy” button. They can buy most products except fresh food. That includes third-party seller items.

In the meantime, OpenAI has recently tested advertising in ChatGPT, raising the likelihood it will compete with retailers for ads. But clashes in some businesses do not appear likely to become a major obstacle to cooperation for the time being.

Michael Morton, an e-commerce analyst at MoffettNathanson, said, “As Amazon’s dominance grows, partnerships that we haven’t seen before are emerging. This looks like almost the only chance to beat Amazon.”

Shopify, whose main strengths are software platforms and payment services that enable building and operating online shopping malls, is actively cooperating with AI companies such as Google and OpenAI. At this point, it is keeping its distance from marketplace rivals Amazon, Target, Walmart and Etsy.

That reflects a judgment that it has something to gain. Shopify can take a portion of payment amounts when merchants using its platform sell through ChatGPT or Gemini.

Large payment platforms are also moving briskly to expand their share in the early AI shopping race. PayPal and Stripe are expanding cooperation on AI shopping with a range of tech and retail companies. PayPal has formed AI commerce partnerships with virtually all major retailers excluding Amazon and with major AI companies.

PayPal decided late last year to work with OpenAI to introduce a real-time payment function that supports shopping payments inside ChatGPT, and it also announced a multi-year partnership with Google for AI shopping. It is also working with AI search startup Perplexity to introduce an in-chatbot payment system. U.S. users can directly book travel, buy goods and purchase concert tickets in the Perplexity chatbot. Payments are processed in one click through PayPal or Venmo.

At this point, cooperation between AI services and payment companies appears to be a model in which each can scratch the other’s itch. AI services need products to sell, but face difficulty building their own seller networks in the short term.

Various partnerships now forming around AI shopping may look plausible at this stage, but their shelf life may not be as long as expected. AI service providers may have reached out because they need payment companies for now, but over time they can independently build relationships with retailers and strengthen payment functions such as digital wallets. The Information said this means payment processors’ share of merchant revenue would shrink.

The same goes for cooperation between Shopify and AI companies. Shopify’s payments business generates more revenue than software subscriptions, but margins are low because it must give part of its earnings to payment processors. The Information said that if traditional retail sites become less important in the long term, Shopify’s business of selling online store software could also come under pressure.

Amazon, which appears to have emerged as a common enemy in the AI shopping arena, has also become a variable in the AI shopping alliance landscape.

Amazon, which has preferred to handle everything needed for shopping in-house rather than cooperate, is discussing a big deal with OpenAI that includes a large-scale investment. There is speculation that it could include shopping cooperation with OpenAI. An AI shopping alliance between Amazon, with its huge user base, and OpenAI could shake the AI shopping alliance structure now designed to target Amazon, drawing attention to what comes next.