Meta's standoff with Amazon over Muse could be a sign of things to come

Meta's rollout of its Muse AI personal agent has been a big hit with consumers and investors. The stock has jumped more than 20% in the two weeks since its introduction, and the app has shot up to the top of Apple's App Store, eclipsing ChatGPT.

But with CEO Mark Zuckerberg set to take the stage at Meta Connect, the company's annual developer conference, late Wednesday afternoon, there are reasons for skepticism regarding Meta's latest effort to find a real and lasting niche in the consumer artificial intelligence market.

Meta is touting Muse's ability to book appointments and travel, fill out electronic forms for users, and monitor home security cameras. It can also shop on a user's behalf, searching for a specific product across various sites and marketplaces and linking to Shopify or Stripe for payment.

Amazon has said that's a no-go, blocking Muse from purchasing products on the e-commerce app, claiming that it would violate the company's terms of service. Whether it's other retailers taking similar steps out of concern that they're at risk of losing the direct relationship with customers, or it's consumers that don't trust the Facebook parent with sensitive data, experts say the social media giant has a long way to go to turn its early momentum in Muse into a winning product.

"People are going to be very wary," said Joseph Turow, a professor emeritus at the University of Pennsylvania and an expert on digital media and privacy. "Some people are going to dip their toes into it, and some people are going to accept it for particular companies that they trust."

Turow said there will be "early adopters," and then others will get "seduced into this," seeing that using this sort of personal agent can save them money by finding the best discounts.

Zuckerberg is pushing deeper into the agentic AI market at a fraught moment for the the AI industry and for Meta. Anthropic and OpenAI are calling for a slowdown in the pace of model development as fears intensify that advanced AI is spinning out of human control and, unless it gets reined in, could threaten humanity or at least amplify cybersecurity attacks.

Meta, meanwhile, agreed last month to pay up to $17 billion to settle a lawsuit brought by a host of states that alleged the company misrepresented the extent of child mental health harms caused by apps like Facebook and Instagram. The emergence of generative AI and chatbots has made the issue of online addiction even more pressing, as both OpenAI and Google have been sued by plaintiffs alleging their technology caused harm, including suicides.

'Fiercely guarding the customer relationship'

Amazon has made clear in the recent past that it won't let AI services stand between the company and its customers. It sued Perplexity in November, alleging the startup took steps to "conceal" its AI agents so they could continue to scrape the retailer's website without its approval. Amazon has also blocked agentic tools from OpenAI and Google.

Amazon's "whole model is fiercely guarding the customer relationship," said Matthew Hassett, CEO of smart alarm clock company Loftie, which sells on Amazon, and of AI-focused ecommerce startup Deliberate. "'Respect service provider decisions' is the polite version of 'not on our shelf.'"

Hassett was quoting Amazon, which said in a statement that "third-party applications that offer to make purchases on behalf of customers from other businesses should operate openly and respect service provider decisions about whether or not to participate."

Meta declined to comment.

Max Willens, an analyst at Emarketer, said that as more consumers use AI agents like Muse, Amazon will get more protective of its role in the "consumer journey."

"For many years, Amazon was the place most U.S. consumers went first if they wanted to buy something online," Willens said "Today, those consumers are increasingly starting those shopper journeys with AI assistants."

Outside of commerce, Muse is raising concern that other industries could see Meta's new agent take over powerful functionality. Shares of financial services companies including Charles Schwab and LPL Financial Holdings tumbled on Tuesday, while travel sites Booking Holdings and Expedia plummeted on Wednesday.

For Meta, the early Muse momentum has reignited optimism on Wall Street, where the stock had been underperforming most of its megacap peers and the broader tech sector this year. With the post-Muse rally, the shares are now up 13% in 2026, just below the Nasdaq's 16% gain.

Analysts at Cantor who recommend buying Meta shares published a report on Tuesday with the headline, "Meta is racing while AI is pacing." They wrote that the business model isn't yet clear for a company that generates almost all of its revenue from digital ads, but the opportunity is apparent.

"We believe the unit economics of Muse are being subsidized in the early days, but we think META has several paths to a profitable freemium model," the analysts wrote.

Mizuho analysts, who also have the equivalent of a buy rating on the stock, said Meta Connect lands at just the right time for the company to link Muse with its AI narrative, particularly around wearables. While Meta never found a big market for its Quest-branded virtual reality glasses, it's seeing much higher adoption of its smart glasses, in partnership with Ray-Ban parent EssilorLuxottica

"We expect Connect to move the Muse story from app adoption to platform creation," the Mizuho analysts wrote on Tuesday. "The likely headline is Muse-on-glasses, combining Meta's rapidly growing AI agent with wearables and creating what we view as the clearest consumer AI use case yet."

— CNBC's Isabel O'Brien contributed to this report.

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