Etsy’s new CEO cracks down on AI listings—and buyers start to return

Etsy's freshly appointed CEO, Kruti Patel Goyal, is implementing a strategy featuring AI to combat the proliferation of AI-generated listings and revive buyer interest. When Etsy started in 2005, its distinctive "keeping commerce human" ethos and focus on small vendors with original products won a dedicated following. However, over time, the company grappled with an influx of listings for resold products and mass-produced goods.

A major issue was AI-generated art and bot-created listings, which undermined buyers' trust and diluted Etsy's unique charm. Etsy's active buyers peaked at nearly 93 million in 2023 but dropped to 86.5 million by the end of 2025. Many sellers have also departed due to AI-supported listings outperforming their own in search results and driving prices down.

Goyal aims to reverse this trend, announcing a rise in active buyers for the first time in two years and increased active sellers since 2024. Etsy's revenue grew by 11% to $692.5 million, surpassing Wall Street's expectations, with gross merchandise sales reaching $2.65 billion. The company has updated its AI policy to restrict certain AI practices and requires listings to include a photograph of the product against a real background.

Goyal plans to leverage AI to help buyers discover relevant items and enable sellers to manage listings, inventory, and search optimization. She emphasizes that despite AI's impact, Etsy's human creativity, craftsmanship, and connections remain essential to its identity.