According to individuals familiar with Amazon’s plans, the company is enhancing its decade-old Alexa voice assistant with generative artificial intelligence and intends to introduce a monthly subscription fee to cover the costs of this technology.
Seattle’s tech and retail giant, Amazon, plans to launch a more conversational version of Alexa later this year. This move aims to compete with new generative AI-powered chatbots from companies like Google and OpenAI, according to two sources who requested anonymity due to the private nature of the discussions. Notably, the enhanced Alexa subscription will not be part of the $139-per-year Prime membership, and Amazon has yet to finalize the pricing, one source mentioned.
Amazon declined to comment on its Alexa plans.
Originally impressing consumers in 2014 with Alexa’s voice-driven tasks, the assistant’s capabilities now seem outdated in the wake of recent AI advancements. OpenAI recently unveiled GPT-4o, capable of deep two-way conversations and real-time language translation. Google introduced a similar generative-AI-powered voice feature for Gemini.
Business Insider first reported Amazon’s plans to update Alexa and introduce a new subscription model in 2024. David Limp, Amazon’s former SVP of devices and services, told The Verge in September that the company was considering charging for a more advanced Alexa.
Recent announcements have been perceived as threats to Alexa and Apple’s Siri. NYU professor Scott Galloway referred to the updates as “Alexa and Siri killers” on his podcast. Currently, many people use Alexa and Siri for simple tasks such as setting timers, alarms, and checking the weather.
The rise of new AI chatbots has increased internal pressure on a division once favored by Amazon founder Jeff Bezos but now faces strict profit demands since his departure.
Three former employees highlighted Bezos’ initial passion for Alexa, which resulted in substantial funding and less immediate pressure for returns. However, this changed under CEO Andy Jassy, who took over in 2021. Jassy, tasked with optimizing Amazon’s business during the pandemic, deprioritized Alexa internally. Reportedly, Jassy was unimpressed with Alexa’s current capabilities, which were seen as limited to basic functions like setting alarms, checking the weather, and playing music.
For example, Jassy, a sports enthusiast, was frustrated when Alexa failed to provide the live score of a recent game, a query easily answered online.
When asked for a comment, Amazon referred to the company’s recent annual shareholder letter. In it, Jassy mentioned that Amazon was developing numerous GenAI applications across its consumer business, including a “more intelligent and capable Alexa.”
The team is now focused on making Alexa relevant amidst new AI competition, justifying its resource allocation and headcount. A significant reorganization has taken place, with much of the Alexa team moving to the artificial general intelligence (AGI) team. Some sources pointed out the team’s bloated size, comprising thousands of employees.
As of 2023, Amazon reported selling over 500 million Alexa-enabled devices, securing a significant consumer base.
Early adopters like Apple, Amazon, and Google were pioneers in integrating AI into their voice assistants, but the latest advancements in generative AI promise even more natural and engaging interactions. According to reports from The New York Times, Apple is poised to introduce a more conversational version of Siri at its annual developers conference in June.
Members of the Alexa team acknowledge that while Alexa was a groundbreaking concept, it may have arrived ahead of its time, posing challenges in steering its development. Additionally, there’s a significant hurdle in attracting AI engineering talent, as companies like OpenAI, Microsoft, and Google compete for the same pool of experts. Moreover, the computational demands of generative AI make it costly, with estimates suggesting a price of around 2 cents per query for Alexa, potentially impacting its pricing strategy.
Despite these obstacles, Alexa boasts a vast installed user base, present in millions of households, presenting a considerable opportunity. However, the pressure is on to ensure accuracy and reliability, as any missteps could erode trust among users already accustomed to having Alexa in their daily lives.
Amazon faces perceptions of lagging in artificial intelligence, despite offering various AI models on its cloud platform. While it lacks a leading large language model, Amazon made a significant investment in AI startup Anthropic, signaling its commitment to advancing in this field. Notably, Amazon plans to utilize its own large language model, Titan, in the upcoming Alexa upgrade.
Jeff Bezos himself has expressed concerns about Amazon falling behind in AI, indicating his ongoing involvement in the company’s AI initiatives. He has reportedly questioned why certain AI startups are choosing other cloud providers over Amazon Web Services, demonstrating his keen interest in maintaining Amazon’s competitiveness in this rapidly evolving landscape.
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