Amazon is set to revamp its decade-old Alexa voice assistant with advanced generative artificial intelligence (AI) technology and plans to introduce a monthly subscription fee to offset the costs, according to sources familiar with the company’s plans.
The upgrade aims to enhance Alexa’s conversational abilities, positioning it to better compete with new AI-powered chatbots from companies like Google and OpenAI.
The enhanced Alexa, expected to launch later this year, will feature more natural and human-like interactions. This upgrade is seen as a response to recent advancements in AI technology by competitors. Last week, OpenAI announced GPT-4o, which supports deep, two-way conversations and real-time language translation. Similarly, Google launched a generative AI-powered voice feature for its Gemini platform.
Amazon’s new subscription for Alexa will be separate from its $139-per-year Prime offering, and the company has yet to finalize the price point, one source noted. The move to a subscription model reflects the significant costs associated with generative AI technology. One source estimated the cost of using generative AI in Alexa at approximately 2 cents per query, suggesting an internal discussion around a $20 monthly fee. However, others argue for a single-digit price to remain competitive against offerings like OpenAI’s ChatGPT, which charges $20 per month.
Alexa’s Back Story and Internal Challenges
Alexa, launched in 2014, initially wowed consumers with its voice-driven capabilities. However, its functions have become outdated in light of recent AI developments. Scott Galloway, a professor at NYU, recently described new AI updates as “Alexa and Siri killers” on his podcast, highlighting the pressure on Amazon’s voice assistant to innovate.
According to sources, Alexa was a passion project of Amazon founder Jeff Bezos, who invested heavily in its development with less immediate pressure for profitability. This dynamic shifted when Andy Jassy became CEO in 2021. Jassy, focused on optimizing Amazon’s business operations during the pandemic, placed stricter profit imperatives on the Alexa division. Internally, there was concern that Alexa had devolved into an expensive device for basic tasks like setting alarms and checking the weather.
A person familiar with Jassy’s views shared an incident where he asked Alexa for the live score of a sports game and was frustrated when the assistant failed to provide an answer easily found online. This exemplifies the internal and external pressures on Amazon to enhance Alexa’s capabilities.
To address these challenges, Amazon has undergone a significant reorganization of the Alexa team, shifting many members to the artificial general intelligence (AGI) team. This move aims to leverage Alexa’s substantial user base, with over 500 million Alexa-enabled devices sold as of 2023.
Amazon’s annual shareholder letter, released last month, highlights the company’s commitment to integrating generative AI across its consumer businesses, including Alexa. The letter states, “We are building a substantial number of GenAI applications across every Amazon consumer business, including an even more intelligent and capable Alexa.”
Expert Insights and Market Position
Despite the challenges, industry experts see potential in Alexa’s large installed user base. Transforming Alexa into a more relevant and advanced AI device could justify the resources dedicated to it. However, attracting top AI engineering talent remains a challenge, as companies like OpenAI, Microsoft, and Google compete for the same pool of experts.
Amazon has been perceived as lagging in AI innovation, despite offering multiple AI models on Amazon Web Services (AWS). To boost its AI capabilities, Amazon invested $2.75 billion in AI startup Anthropic, its largest venture investment to date. Amazon plans to use its own large language model, Titan, in the Alexa upgrade.
Bezos remains actively involved in Amazon’s AI efforts, reportedly expressing concern over Amazon’s position in the AI race. Bezos has been questioning why certain AI startups prefer other cloud providers over AWS, according to sources.
Amazon’s decision to upgrade Alexa with generative AI and introduce a subscription fee marks a significant shift in its strategy for the voice assistant. With the e-commerce’s substantial user base and growing investments in AI technology, this shift is expected to transform Alexa into a more capable and intelligent assistant.
“Alexa, let’s try AI.” Amazon is adding generative artificial intelligence to its 10-year-old voice assistant — and the upgrade will be accompanied by a monthly subscription fee, CNBC reports, citing anonymous sources. The “more conversational” Alexa is set to debut later this year and help the e-commerce giant better compete with new chatbots from Google and OpenAI, which some have called “Alexa and Siri killers.” Many users rely on Alexa for basic duties such as setting timers; recently, the Alexa team has worried that they invented “an expensive alarm clock,” one source says.
