Amazon Introduces Rufus, an AI Shopping Tool, and Reports Earnings

Amazon Introduces Rufus, an AI Shopping Tool, and Reports Earnings
Amazon Introduces Rufus, an AI Shopping Tool, and Reports Earnings

Amazon entered the consumer chatbot fray on Thursday, announcing a new artificial intelligence personal shopping assistant as the company races to catch up with other tech giants.

Customers can ask the tool, Rufus, product questions directly in the search bar of the company’s mobile app, Amazon said in a blog post. The A.I. will then provide answers in a conversational tone. The examples provided in the announcement included comparing different kinds of coffee makers, recommendations for gifts and a follow-up question about the durability of running shoes.

Rufus will be available starting on Thursday to a “small subset of customers,” according to the post, and it will be rolled out to additional customers in the coming weeks. Amazon declined to provide more details about how many people will be part of the tool’s initial release.

Amazon allows its employees to bring their dogs to work, and a dog named Rufus was one of the first to roam its offices in the company’s early days.

Amazon has been racing to shake off the perception that it is behind on the wave of A.I. tools unleashed more than a year ago, when the start-up OpenAI released its ChatGPT chatbot. If customers find Rufus helpful and popular, Amazon could shake up the business of searching for products — and control even more of the experience of shopping online.

Rufus “lets customers discover items in a very different way than they have been able to on e-commerce websites,” Andy Jassy, the company’s chief executive, said on a call with investors. “It’s seamlessly integrated in the Amazon experience that customers are used to and love to be able to take action,” he said.

Microsoft and Google last spring released chatbots and A.I. tools for their search engines, often highlighting shopping-related uses, and start-ups like Perplexity have tried to redesign the search experience with A.I. in mind.

In the fall, Amazon released a corporate chatbot, called Q, for customers of its cloud computing division, and the company said it was working to make its Alexa voice assistant more conversational.

Even without generative A.I., the Amazon search bar and the top results it produces are some of the most important placements in online retail. They have been the subject of antitrust inquiries, and the product ads in the search results are a foundation for the company’s booming advertising business.

Consumers are more than twice as likely to search first on Amazon versus other search engines when they are looking for a specific product to buy. But the e-commerce giant has long wanted to attract customers when they are still brainstorming and researching their options, when they typically turn to other sources, from TikTok to Google. Rufus is an attempt to bring customers into Amazon before they know precisely what they want.

“You will still be able to search in the search bar if you are very clear with what you want,” Brian Olsavsky, the company’s finance chief, said in a call with journalists on Thursday. “Rufus is more there to help you explore, and maybe if you have more questions.”

“It becomes more of a conversation with Amazon,” he said.

The Rufus tool is “trained on Amazon’s extensive product catalog, customer reviews, community Q. and A.s, and information from across the web,” the company said.

Mr. Jassy said during the earnings call that customers could ask Rufus for recommendations for the best golf ball to use for better spin control, or the best cold weather rain jackets “and get thoughtful explanations for what matters and recommendations on products.”

If Rufus takes off, Amazon could take ad sales away from Google and social media sites, where companies try to influence what customers decide to buy.

Amazon itself is a prolific advertiser on Google and social media apps, trying to bring in customers earlier in their shopping process. Google, for its part, has tried for years to encroach on Amazon’s turf too, starting several shopping initiatives to attract independent sellers, with little success.

Separately on Thursday, Amazon reported strong fourth-quarter earnings, fueled in part by the holiday season.

Sales in the quarter hit $170 billion, up 17 percent from a year earlier. The company had $10.6 billion in profits. The results beat analysts’ expectations and Amazon’s own forecast.

The services the company provides to third-party sellers on its marketplace, including fulfillment and shipping, and the advertisements it offers to brands and sellers experienced particularly strong quarters.

Investors have been keeping a close eye on Amazon’s most profitable segments — cloud computing and advertising. Advertising grew 27 percent, to $14.7 billion, in sales, and Amazon Web Services grew 13 percent, to $24.2 billion, just meeting investor expectations.

Over the past year, the company cut tens of thousands of jobs, ended speculative projects, halted some expansion plans and reorganized its logistics operations to be faster and more efficient. The company had its highest ever quarterly operating income, and projected confidence that profitability would continue.

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Kyle C. Garrison

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