$40 billion. That's how much brands spent on retail media search ads last year,
By Liranhirschkorn · March 11, 2026 · Curated by George's Blog
$40 billion.
That's how much brands spent on retail media search ads last year, mostly on Amazon. It makes up roughly 64% of all retail media spending.
Gartner predicted that traditional search volume would drop 25% by 2026 because of AI chatbots.
We're in 2026 now. And last week, The Information announced that OpenAI is "killing" Instant Checkout after just five months. So is AI actually coming for retail media, or not?
Here's what I think is actually happening:
AI is absolutely changing how people discover products. ChatGPT handles 50 million shopping queries a day. Amazon's Rufus has been used by 250 million shoppers and drives 60% higher conversion. Walmart says Sparky users build baskets 35% larger than non-users.
But there's a difference between discovery and transaction.
When someone asks ChatGPT "what's the best allergy medicine that won't make me drowsy?", ChatGPT can answer that. But when it's time to actually buy, the shopper still ends up on Amazon, Walmart, or the brand's website.
That's exactly why OpenAI pulled Instant Checkout. Discovery works. Checkout doesn't; not inside a chatbot.
So what does this mean for brands spending on Amazon search ads?
Retail media search isn't dying. But it is splitting into two layers:
Layer 1: Traditional keyword search — still massive. Sponsored Products and Sponsored Brands on Amazon aren't going anywhere. Shoppers who know what they want still type it into the search bar.
Layer 2: AI-driven discovery — growing fast. Rufus, Sparky, ChatGPT. These surface products based on relevance and reviews, not just bid price. The brands with rich content, strong reviews, and structured product data get recommended.
If your listing is optimized for keywords but not for how AI reads and recommends your product, you're only playing on one layer.
And that second layer is where the incremental growth is showing up.