Amazon.com, Inc. (AMZN.US) surpasses Walmart Inc. (WMT.US) in annual revenue for the first time, marking a new stage in competition between the retail giants in AI.

The long-term competition between e-commerce giants and traditional retail leaders is at a critical juncture. Amazon.com, Inc. (AMZN.US) has exceeded Walmart Inc. in annual revenue for the first time, becoming the company with the highest annual revenue in the world, marking a historic change in the competition between the two retail giants. According to the latest financial report released by Walmart Inc. (WMT.US) on Thursday, its annual revenue was $713.2 billion, slightly lower than Amazon.com, Inc.'s $716.9 billion. This change has been brewing for a while. About a year ago, Amazon.com, Inc. surpassed Walmart Inc. in quarterly revenue for the first time. Although this change has more symbolic meaning, it also highlights the intense game between the two sides in the ever-changing consumer preferences and business model evolution. With artificial intelligence (AI) reshaping business operations, monetization methods, and sales paths, the competition between Amazon.com, Inc. and Walmart Inc. is entering a new stage. Amazon.com, Inc.'s top position in revenue is not solely reliant on its vast online retail platform and fast delivery system. Although its retail business is still its biggest source of revenue, diversification with cloud computing, advertising, and third-party seller services also provides important support. According to Amazon.com, Inc.'s latest annual report, third-party seller services (including commissions, fulfillment, logistics, advertising, and customer support fees) account for about 24% of the company's total revenue in 2025, while Amazon.com, Inc.'s cloud service (AWS) contributes approximately 18%. Walmart Inc. losing its top position is not due to its own lack of growth. Over the past 20 years, its revenue has more than doubled. The company continues to drive the development of its online business, leveraging its over 4,600 Walmart Inc. stores in the U.S. and approximately 600 Sam's Club stores. In the latest fiscal quarter, Walmart Inc.'s U.S. e-commerce business grew by 27% year-on-year and has maintained double-digit growth for 15 consecutive quarters. At the same time, Walmart Inc. continuously learns from Amazon.com, Inc.'s successful experiences, attempting to position itself as a "tech company + retailer" hybrid. This transformation path has revealed multiple signals. In early December last year, Walmart Inc. moved its stock listing from the New York Stock Exchange to the tech-stock-heavy NASDAQ; earlier this month, its market value exceeded $1 trillion, a valuation that previously belonged almost exclusively to tech giants including Amazon.com, Inc. Financial reports also show that digital advertising and third-party platform business significantly boosted profits in the fourth quarter, reflecting Walmart Inc.'s accelerated shift towards high-margin businesses, weakening its reliance on traditional offline retail. In the field of AI, both sides have different emphasis on their deployment paths. Walmart Inc. has accelerated the expansion of third-party platforms in recent years, seen as a direct response to Amazon.com, Inc.'s platform advantage. At the same time, the company is seeking differentiation breakthroughs in the new wave of AI. In October last year, Walmart Inc. partnered with OpenAI's ChatGPT and introduced Alphabet Inc. Class C's Gemina model in January to enhance the shopping search and purchasing experience. In addition, Walmart Inc. has introduced its own AI shopping assistant "Sparky" to help users efficiently discover products within the app. During the performance conference call, Walmart Inc. management revealed that consumers using Sparky have an average order value about 35% higher than users who do not use the tool, and about half of the U.S. app users have experienced this AI assistant. Company executives stated that "proactive AI" is gradually embedded in all aspects of Walmart Inc.'s business, improving operational efficiency, employee productivity, and enhancing customer experience. Chief Financial Officer John David Rainey pointed out that AI investment has been included in the annual capital expenditure plan, accounting for about 3.5% of sales, covering automation and store transformation investments. However, he also emphasized that Walmart Inc. will push forward AI applications more through cooperation with tech companies rather than developing underlying technologies on its own. In contrast, Amazon.com, Inc. has taken a more closed strategy in the wave of "proactive business." Although AI manufacturers such as OpenAI and Alphabet Inc. Class C are trying to change online shopping methods through automation tools, Amazon.com, Inc. has not opened its platform interface to the public, instead strengthening its own shopping chatbot, Siasun Robot & Automation's Rufus. This tool is driven by Amazon.com, Inc.'s proprietary model and Anthropic's Claude model, used by over 300 million users last year, bringing in nearly $12 billion in annual incremental sales. Amazon.com, Inc. has deeply embedded Rufus in its app and website to increase user frequency. At the infrastructure level, Amazon.com, Inc. has been more aggressive in investing in AI. The company announced earlier this month that it will invest up to $200 billion in AI-related projects by 2026, surpassing any other hyperscale cloud service provider, mainly for data centers, chips, and network equipment construction. However, Wall Street is cautious about its high capital expenditure. Since the release of the financial report on February 5th, Amazon.com, Inc.'s stock price has been declining for several days, with a market value evaporating by over $450 billion.