Amazon's rapid expansion into artificial intelligence, advertising, and supply chain services is prompting analysts to reconsider what kind of company it has become, even as its core retail operations continue to fuel growth across all divisions.

"Is Amazon even a retailer anymore?" said our analyst Suzy Davidkhanian on a recent episode of "Behind the Numbers." "It started as a bookstore. It turned into a marketplace. Then it became AWS, and then they started selling their fulfillment services, and then advertising, and now they're making AI chips."

Amazon reported over $180 billion in total revenue in Q1 2026, up 17% YoY. While online net store sales remain the largest revenue slice at 35%, that share has shrunk from 50% in 2020. AWS now accounts for 20% of total revenue (growing 28%), advertising represents nearly 10% (growing 24%), and third-party seller services contribute 24%.

Amazon's most valuable ad service

Amazon dissolved its Rufus chatbot into an Alexa for Shopping bot last month, and is aggressively positioning this tool as a premium advertising environment, recently pitching advertisers on the ability to convert browsers into buyers.

"Amazon is really pushing ads into Rufus," said our analyst Marisa Jones. "They're positioning this as a point where users are actively looking for a specific product or a specific solution to a problem. It's a very high-intent environment."

The challenge will be maintaining user trust while monetizing these AI interactions, especially as AI-generated summaries rank among the least trusted sources for online shoppers at just 15%, according to Bizrate Insights data.

The backbone of retail supply chains

Amazon recently announced Amazon Supply Chain Services, an end-to-end fulfillment offering that extends far beyond its current seller base to include major brands like P&G and 3M.

"This is really to get to the root of supply chains," said Davidkhanian. "They already had Fulfilled by Amazon. They have Buy with Prime. They have lots of different components of the fulfillment process, but this is really way beyond."

The move mirrors Amazon's AWS playbook: Build infrastructure for internal use, then monetize it by selling to others. However, supply chain services are far more capital-intensive than cloud computing.

"The more pots of supply chain that they're in, the better it is for them," said Davidkhanian.

Whether the service proves profitable remains uncertain, but Amazon's track record of experimentation, testing, pivoting, and refining until finding the right formula, suggests the company will persist until it identifies a sustainable model.

AI-generated search overviews

Amazon is testing AI-generated search overviews that would show shoppers a curated selection of three products with backup options, rather than confronting them with pages of similar-looking items.

The approach could minimize decision paralysis and increase conversions, but it also means fewer products displayed, and consequently fewer advertising opportunities.

"I think it depends on the category," Davidkhanian said. "If it's an everyday household item that you're constantly buying, you probably will even skip the overviews. But if you're kind of open and on the fence about the brand, I think it'll help change discovery."

AI overviews represent a different approach to curation, showing shoppers what's relevant at the moment they're ready to purchase. The challenge is providing enough friction for discovery without causing shoppers to leave. As AI models learn more about individual users and product catalogs, these recommendations should improve, but retailers must ensure they're part of this evolution or risk losing visibility in an AI-driven shopping environment.

Listen to the full episode.