Amazon To Upgrade Alexa...At A Price

Amazon is upgrading its decade-old Alexa voice assistant with generative artificial intelligence and plans to charge a monthly subscription fee to offset the cost of the technology, according to CNBC citing people with knowledge of Amazon’s plans. 

The Seattle-based tech and retail giant will launch a more conversational version of Alexa later this year, potentially positioning it to better compete with new generative AI-powered chatbots from companies including Google and OpenAI, according to two sources familiar with the matter, who asked not to be named because the discussions were private. Amazon’s subscription for Alexa will not be included in the $139 per year Prime offering, and Amazon has not yet nailed down the price point, one source said.

Amazon declined to comment on its plans for Alexa. 

While Amazon wowed consumers with Alexa’s voice-driven tasks in 2014, its capabilities could seem old-fashioned amid recent leaps in artificial intelligence. Last week, OpenAI announced GPT-4o, with the capability for two-way conversations that can go significantly deeper than Alexa. For example, it can translate conversations into different languages in real time. Google launched a similar generative-AI-powered voice feature for Gemini. 

Some interpreted last week’s announcements as a threat to Alexa and Siri, Apple’s voice assistant feature for iPhones. NYU professor Scott Galloway called the updates the “Alexa and Siri killers” on his recent podcast. Many people use Alexa and Siri for basic tasks, such as setting timers or alarms and announcing the weather.

The development of new AI chatbots in recent months has increased the pressure internally on a division that was once seen as a darling of Amazon founder Jeff Bezos, according to the sources — but has been subject to strict profit imperatives since his departure. 

Three former employees pointed to Bezos’ early obsession with Alexa, describing it as the Amazon founder’s passion project. Attention from Bezos resulted in more dollars and less pressure to make a return on those dollars immediately. 

That changed when Andy Jassy took over as CEO in 2021, according to three sources. Jassy was charged with right-sizing Amazon’s business during the pandemic, and Alexa became less of a priority internally, they said. Jassy has been privately underwhelmed with what modern-day Alexa is capable of, according to one person. The Alexa team worried they had invented an expensive alarm clock, weather machine and way to play Spotify music, one source said.  

Apple, Amazon and Google were early movers with their voice assistants, which did employ AI. But the current wave of advanced generative AI enables much more creative, human-sounding interactions. Apple is expected to unveil a more conversational Siri at its annual developers conference in June, according to the New York Times.