3 ways Etsy is investing in AI, according to its CEO

Etsy CEO Kruti Goyal said she thinks about artificial intelligence (AI) in three ways: making the online marketplace more personal and more discoverable, while learning how the next generation of the shopping experience is going to evolve.

She noted that agentic AI experiences still account for less than 1% of Etsy’s overall traffic as of the end of its fiscal Q2 2026. AI trends are still comparable to what Etsy noticed earlier this year, she said. That is, Etsy has seen higher intent and average order value (AOV) from AI-referral traffic.

“We see the biggest opportunity for AI on Etsy itself,” Goyal said on the marketplace’s Q2 earnings call. “It’s really about using AI to make Etsy much, much better at connecting the right buyers with the right sellers.”

Chief financial officer Charles Baker said Etsy is spending more money on AI usage and computing this year.

“But the overall spending that we’re doing on hosting and bandwidth and technology is exactly where we thought it would be this year,” Baker said. “And we’ve been able to find offsets in other places. And shifting usage patterns allows us to absorb the cost of the incremental compute without going higher on our overall sort of infrastructure cost, so we feel really comfortable about our ability to continue to manage that AI cost, hosting bandwidth cost as we look forward.”

Etsy is No. 20 in the Global Online Marketplaces Database. The market research tool ranks the 100 largest marketplaces by third-party gross merchandise value (GMV).

What Etsy is learning from its AI integrations

Goyal said Etsy’s AI strategy currently focuses on three areas:

• improving product discovery
• delivering more personalized shopping experiences
• experimenting with agentic and conversational commerce

Ultimately, the online marketplace wants to better understand what buyers are looking for, the CEO explained. That means better understanding the buyers themselves and Etsy’s inventory so it can “surface the most relevant inventory from the full breadth of our marketplace,” she added.

Goyal said that’s where Etsy thinks AI will deliver the most value over time. It makes the marketplace feel more personal, which helps its sellers while enabling more inventory discovery, she said.

Etsy has partnered with OpenAI, Google and Microsoft on enabling agentic commerce. In January, Etsy announced it would sell directly through Google AI Mode.

Etsy is also one of the backers of Google’s Agent Payments Protocol (AP2), along with Mastercard, PayPal, American Express, Coinbase, Salesforce, Shopify and Cloudflare.

“We’re continuing to partner with these major AI platforms because we want to be in there and learning and evolving our experience as consumer behavior and adoption evolves,” Goyal said.

She said the online marketplace is experimenting actively with AI-native shopping experiences on Etsy itself.

“We think that there’s a really interesting opportunity to use these conversational interfaces to get more context more quickly to understand intent in any given shopping mission,” Goyal said.

Etsy’s gifting assistant is a good example of that, according to Goyal. She said it gives buyers “a more natural, conversational way to express what they’re looking for, and it’s helping us learn actively in that space.”

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