Amazon Vs Perplexity: Who Holds The Edge In This AI Battle?

In what appears to be a high-stakes battle unfolding in the global AI landscape, tech giant Amazon has sued Perplexity. The bone of contention: Comet, an AI-powered web browser developed by Perplexity. Amazon is enraged that Aravind Srinivas’ AI company is allegedly using its ‘agentic’ shopping feature to access the ecommerce major’s customer data.

In a legal suit filed by Amazon earlier this week, the company stated, “Perplexity is not allowed to go where it has been expressly told it cannot; that Perplexity’s trespass involves code rather than a lockpick makes it no less unlawful.”

According to Amazon, Perplexity, backed by the ecommerce major’s founder and former boss Jeff Bezos, has persistently refused to operate transparently with respect to its agentic AI product in the Amazon Store.

“Perplexity must immediately cease using, enabling, or deploying Comet’s artificial intelligence (“AI”) agents or any other means to covertly intrude into Amazon’s ecommerce websites,” said the company in its ‘Demand to Cease and Desist’ letter earlier.

In its defence, Perplexity has accused Amazon of bullying and stifling ‘innovation’. In a blog post titled “Bullying Is Not Innovation”, team Perplexity said, “Amazon wants to eliminate user rights so that it can sell more ads right now and partner with AI agents designed to take advantage of users later. It’s not just bullying, it’s bonkers.”

So, who has the upper hand in this high-stakes showdown? Well, industry experts see Amazon’s legal step as having more merit.

What Heats Up The AI Dogfight?

Ankush Sabharwal, the founder and CEO of CoRover, said that every company has its own vision as to how it wants to sell its products, how it wants to engage its consumers, and the way it wants to create the perception of its products and platforms.

“When shopping is done end-to-end by agentic AI, which is technically a bot, users can end up buying products without seeing reviews or product descriptions, which might lead to dissatisfaction. Even if it creates business for a platform, there is a huge risk here,” said Sabharwal.

In fact, Amazon has expressed concerns that Comet AI shops and makes purchases from the Amazon Store, and it may not exhibit the ability to select products based on factors like best price, delivery method, or recommendations.

“Comet AI degrades the Amazon shopping experience in this and other ways to the detriment of our customers and their relationships with Amazon,” alleged in its lawsuit.

Nevertheless, it is also crucial to take note that Perplexity, in its post, wrote that its AI assistant makes it easier to find and purchase products on Amazon.

“If you’re logged in to Amazon (credentials in Comet are stored securely only in your device, never on Perplexity’s servers), the Comet Assistant quickly finds and purchases the item for you, saving you time for more important tasks. Or, you can ask it to compare options and purchase the best one for your needs…”

Perplexity has also criticised Amazon for trying to influence customers’ purchase decisions with sponsored results, ads, upsells and “confusing” offers.

The cofounder and CEO of agentic AI startup RevRag, Ashutosh Singh, sees it as legitimate for the company to try and protect its data that it has built and aggregated over the past 20 to 30 years.

However, more importantly, Singh believes the matter turned into a legal case because Amazon is threatened — after all, agentic AI-based shopping is expected to be the next big thing in ecommerce universe, and Amazon, too, is working towards it.

Earlier this year, the ecommerce major launched a “Buy For Me” feature in the US, which allows users to shop more quickly across brands on its app. Its AI assistant, Rufus, helps customers find products more easily, manage carts better and find answers to product-related queries, and is increasingly gaining more traction worldwide. Besides, Rufus is expected to start generating $10 Bn+ in annual incremental sales.

“Had it been a much smaller player doing it, Amazon wouldn’t have taken a legal step,” Singh opined.

On Amazon’s AI Turf War

In its earnings call earlier this month, Amazon CEO Andy Jassy talked about the company’s strong belief that AI agents will shape the future of ecommerce. He also said that Amazon is also holding talks with the providers of ‘third-party agents’ and expects to partner with them over time.

However, he noted that there are still significant gaps to be addressed.

“I do think that we will find ways to partner. We have to find a way to make the customer experience good,” said Jassy, adding that current agentic solutions lack personalisation, do not reflect shopping history, often show incorrect delivery estimates, and display inaccurate prices.

Amazon’s view on agentic AI and third-party partnerships is important to understand because at a time when it is looking for collaborations, Perplexity is in no legal pact with the ecommerce behemoth in which the Comet assistant is allowed to shop on the Amazon platform at the behest of users.

“If such experiments have to be carried out, there should be legitimate partnerships and consent involved,” Sabharwal said.

Meanwhile, TeamLease Regtech cofounder and CEO Rishi Agrawal sees the current situation as yet another classic David-versus-Goliath case in the tech ecosystem.

He recalled the 1990s, when one of the first popular web browsers, Netscape Navigator, was eventually overtaken by Microsoft’s Internet Explorer.

“The abuse of dominant position, restrictive and monopolistic trade practices and violations of customer interests are nothing new — they have been happening for years, and everybody tries to get their pound of flesh,” said Agrawal.

While Perplexity says that its AI assistants are not bots or crawlers, rather an extension authorised by users to go and shop on their behalf, Amazon is clear that the agentic bot is violating its browsing policy.

“Like most big techs, Amazon, too, has a walled-garden approach. It wants to make sure that its users are not taken advantage of. Tomorrow, if Comet becomes powerful enough with all the ecommerce data, it can lead users to purchase from multiple other platforms, bypassing Amazon,” Agrawal said.

Besides, data security on Comet AI is also a growing concern. While this is a topic for another day, the blazing question for now is: where will this AI dogfight lead?

[Edited By Shishir Parasher]

The post Amazon Vs Perplexity: Who Holds The Edge In This AI Battle? appeared first on Inc42 Media.