Etsy Tightens AI Listing Rules as Quarterly Buyer Growth Returns

Etsy is tightening rules for AI-related listings while applying artificial intelligence across its shopping and seller tools, as quarterly active buyers rose for the first time in two years.

Etsy announced last week that most listings must include an unedited product photograph taken against a real background. Sellers also face broader disclosure requirements for AI use, including when that use complies with Etsy’s rules.

The policy update comes as active buyers increased for the first time in two years and active sellers grew at their strongest pace since 2024. Etsy’s active-buyer count had fallen from about 93 million in 2023 to 86.5 million by the end of 2025.

Etsy’s latest quarterly results showed revenue rose 11% to $692.5 million, while gross merchandise sales — the value of items sold on the site — climbed 9% to $2.65 billion.

CEO Kruti Patel Goyal, who joined Etsy in 2011 and took the role at the start of 2026, said AI and machine learning can help infer shoppers’ tastes and guide them toward suitable items. Etsy also has an AI shopping assistant for detailed searches and uses AI to help find listings that misuse the technology and remove those that violate its rules.

AI tools also help sellers draft listings, manage inventory, find images, improve search visibility and promote products to influencers. Some sellers have complained that AI-supported listings can rank above their original work and compete at lower prices.

Goyal told investors that as AI makes it easier to create and reproduce products at scale, “we believe the human creativity, craftsmanship and connection that have always made Etsy special will matter even more.”