By Belle Lin

EBay, a survivor of the first generation of internet companies, is trying to remake itself for the age of artificial intelligence.

The company rode the internet's early e-commerce boom and the dawn of the mobile era to become a publicly traded billion-dollar firm, but has since faced activist investor pressure amid slowing sales from inflation-weary consumers and intense competition from market leader Amazon.com.

In 2020, eBay lost its second-place standing among America's largest online retailers to Walmart, according to eMarketer. It is now fourth, behind Apple.

Looking to boost its business and shed its reputation as an online auction house, the company is making use of AI agents, encouraging engineers to use AI to write code and launching AI features that personalize buying and simplify selling.

Chief Executive Jamie Iannone said eBay sees AI as an "opportunity to really be on the leading edge, both with our customer experience, but also with how we innovate."

But there will be plenty of challenges, starting with how its AI efforts compare with those of deep-pocketed rivals like Amazon as well as Walmart and Etsy, all of whom have been consistently investing in the tech behind their platforms.

"If eBay were in a race, we were maybe trailing," said Mazen Rawashdeh, eBay's chief technology officer. "The AI era reset the clock for us."

Here is eBay's plan:

Homegrown AI and data

The San Jose, Calif.-based company manages and runs its own data centers, helping it maneuver the tech infrastructure changes that AI requires, the company said. That includes amassing its own graphics processing units.

Parantap Lahiri, eBay's vice president of network and data center engineering, said the company has thousands of its own GPUs but also relies on the major cloud providers, including Microsoft's Azure. The company works with multiple suppliers, including Nvidia, to procure its GPUs and other hardware. EBay also uses AI models from ChatGPT-maker OpenAI, Lahiri said, as well as open-source models from companies like Meta Platforms, and trains its own AI models.

The company last year announced that it had built a supercomputer using its own hardware. That enabled eBay to build and run models about 100 times as large as the year before, according to the company.

EBay's other advantage, its executives argue, is its three decades of data from its buyers and sellers, who have collectively made billions of transactions. That data, rich in consumer insights, is easily tapped by large language models, said Rawashdeh.

In the past several years, eBay has zeroed in on selling what it calls "focus" categories, which include trading cards, luxury goods, refurbished items, and parts and accessories, that have helped the platform recapture growth.

Using AI to help find products is a critical need for eBay's marketplace, according to Deutsche Bank analyst Lee Horowitz. That's because eBay's product listings are nonstandard -- it's not as easy to find a limited-edition trading card as it is to find a generic tube of toothpaste, he said.

Combining old and new

In other areas of the company, AI is a foundation for its over 11,500 employees, who are asked to work the technology into their daily tasks, executives say.

Each project an employee embarks on should have an AI agent attached, said Nitzan Mekel-Bobrov, eBay's chief AI officer. The bots, built and hosted on eBay's platform, can be created by any employee for specific tasks they're doing, have a record of every meeting, and should reduce the need for workers to schedule new ones by a double-digit percentage this year, he said.

For eBay's engineers, AI is used to help write code. The company is using and testing different AI-based coding tools, such as Microsoft's GitHub Copilot and "vibe coding" tools like Windsurf and Cursor, according to Senthil Padmanabhan, eBay's vice president of engineering, global verticals and API platform.

The company also built its own AI model, trained on over 100 million lines of its own code, to do things like improve the efficiency of its code upgrades and code translations.

Yet a complete code upgrade can't happen overnight. EBay needs to maintain its decades-old code base, according to Baird analyst Colin Sebastian.

"What they're doing in technology is a multifaceted process," he said. "One is embracing the latest and greatest AI and the other is still dragging along the legacy technology that they still need."

AI for buyers and sellers

To make it easier for sellers to list items, EBay rolled out an AI feature called "magical listings." After sellers take a photo, eBay's AI fills in the rest of the item's details, including its suggested listing price.

Like other AI-generated content, however, eBay's item descriptions have been criticized online as low-quality, shallow content. On a Reddit thread, one user said they preferred eBay sellers that didn't use the AI function, calling its use a sign that sellers weren't knowledgeable.

EBay said that as AI itself has improved, it has continued to make improvements to its tech based on feedback from buyers and sellers, and sellers always have control over the final product description.

EBay's AI shopping agent makes it easier for buyers to find their desired products and offers personalized product suggestions. Mekel-Bobrov, the company's chief AI officer, said the goal is for AI agents to take over a significant proportion of things buyers and sellers do on eBay by the end of the year.

Selling the future

One of eBay's challenges is going up against deep-pocketed tech giants. Amazon last year announced Rufus, an AI-powered shopping assistant that relies on neurosymbolic AI to help buyers navigate the shopping platform and answer product-related questions.

Bargain-focused retailers Temu and Shein have also been gaining ground. EBay held 3% of the nation's online retail sales in 2025, based on eMarketer estimates, compared with Temu at 2.0% and Shein at 1.6%. Leader Amazon owns 40.6%.

Yet it may not matter whether eBay can capture mass retail share going up against the likes of Amazon, according to Deutsche Bank's Horowitz. As long as eBay keeps growing in its key product categories that could be enough to satisfy Wall Street.

In its most recent quarter, eBay logged higher profit and revenue as its gross merchandise volume rose. The company posted a profit of $368 million, compared with $224 million a year earlier.

"The investments they are making into their technology stack around AI are putting them in a position to take share in the verticals they're focused in," Horowitz said.

Write to Belle Lin at belle.lin@wsj.com

(END) Dow Jones Newswires

September 05, 2025 07:00 ET (11:00 GMT)

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