Etsy tightens AI rules as buyer numbers rise for first time in two years — Fortune
In the United States, marketplace Etsy has tightened its rules for listings using artificial intelligence. At the same time, the number of active buyers on the platform increased over the quarter for the first time in two years, Fortune reports.
The company also reported its largest increase in active sellers since 2024. Etsy’s quarterly revenue rose 11% to $692.5 million, exceeding Wall Street expectations. Gross merchandise sales, meaning the value of goods sold through the platform, increased 9% to $2.65 billion. The company’s shares gained 4% on Wednesday.
New requirements for listings
Last week, Etsy updated its AI-use policy to limit the negative consequences of using this technology. Most listings must now include at least one unedited photo of the product against a real background. The platform also requires more detailed disclosure of AI use, even when it complies with its rules.
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According to Fortune, AI-generated works and listings created by bots have weakened some buyers’ trust in Etsy. The number of active buyers reached about 93 million in 2023 but fell to 86.5 million by the end of 2025. Sellers complained that AI-assisted listings often outranked their original products in search results and offered lower prices.
AI for product searches and detecting violations
Etsy CEO Kruti Patel Goyal, who took over the company in early 2026, also plans to use AI to improve the platform’s performance. According to her, artificial intelligence and machine learning can identify customer preferences and help them find suitable products among a large number of offers.
Etsy also uses an AI assistant for more complex and precise search queries. The company views AI as a tool for detecting improper use of the technology and removing listings that violate the rules. For sellers, the technology helps create listings, manage inventory, search for images, optimize search rankings and promote products through influencers.
