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 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-based chatbots from companies like 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 set the price, a source said.
Amazon declined to comment on its plans for Alexa.
While Amazon wowed consumers with Alexa voice tasks in 2014, its capabilities might seem dated amid recent advances in artificial intelligence. Last week, OpenAI announced GPT-4o, with the capability for two-way conversations that can go much further 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.
Business Insider first reported on Amazon’s plans to revamp Alexa and launch a new paid subscription plan in 2024. Former Amazon SVP of Devices and Services David Limp said to The Verge in September that the company was considering charging for a more powerful version of Alexa.
Some interpreted last week’s announcements as a threat to Alexa and Siri, Apple’s voice assistant for iPhone. NYU professor Scott Galloway called the updates “Alexa and Siri killers” in 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 internal pressure on a division that was once considered the darling of Amazon founder Jeff Bezos, according to sources, but which has been subject to strict profit imperatives since his departure .
Three former employees highlighted Bezos’ early obsession with Alexa, describing it as his passion project. Bezos’ attention has meant more money and less pressure to make those funds immediately profitable.
That changed when Andy Jassy took over as CEO in 2021, according to three sources. Jassy was tasked with rightsizing Amazon’s business during the pandemic, and Alexa became less of a priority internally, they said. Jassy has been privately disappointed by what modern-day Alexa is capable of, according to one person. The Alexa team was worried they had invented an expensive alarm clock, a weather machine and a way to play Spotify music, a source said.
For example, Jassy, a sports enthusiast, asked the voice assistant for the live score of a recent game, according to someone in the room, and was openly frustrated that Alexa didn’t know an answer if easy to find online.
When reached for comment, Amazon pointed to the company’s annual letter to shareholders released last month. In it, Jassy mentions that the company is developing “a significant number of GenAI applications across every Amazon consumer business,” adding that this includes “an even smarter, more capable Alexa.”
The team is now tasked with making Alexa a relevant device that stands up to new competition from AI, and justifies the resources and manpower Amazon is devoting to it. It underwent a massive reorganization, with much of the team moving to the artificial general intelligence, or AGI, team, according to all three sources. Others pointed out the bloat within Alexa, a team of thousands of employees.
By 2023, Amazon said it has sold more than 500 million Alexa-enabled devices, giving the company a foothold with consumers.
Apple, Amazon and Google were the first to offer their voice assistants, which used AI. But the current wave of advanced generative AI enables much more creative and 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.
Those who have worked on the Alexa team describe it as a great idea that was perhaps too early and that it is going to be difficult to turn the ship around.
There is also the challenge of finding AI engineering talent, as OpenAI, Microsoft and Google recruit from the same pool of academics and technology talent. Additionally, generative AI workloads are expensive due to the hardware and computing power required. One source estimated the cost of using generative AI in Alexa at 2 cents per query, and said a price of $20 had been proposed internally. Another suggested the amount should be a single-digit amount, which would hurt other subscription offerings. OpenAI’s ChatGPT charges $20 per month for its advanced models.
Still, they see Alexa’s installed user base, with devices in hundreds of millions of homes, as an opportunity. Those who have worked on Alexa say the fact that it’s already in people’s living rooms and kitchens makes the stakes higher and mistakes more costly if Alexa doesn’t understand a command or provides unreliable information.
Amazon is fighting against the impression of being behind in artificial intelligence. Although it offers several AI models on Amazon Web Services, it does not have a large leading language model to topple OpenAI, Google or Meta. Amazon spent $2.75 billion to back AI startup Anthropic, its largest venture capital investment in the company’s three-decade history. Google also has an Anthropic investment and partnership.
Amazon will use its own large language model, Titan, in the Alexa upgrade, according to a source.
Bezos is among those who have expressed concern about Amazon’s lag in AI, according to two sources close to him. Bezos is still “very involved” in Amazon’s AI efforts, CNBC reported last week, and has sent emails to Amazon executives questioning why some AI startups choose others cloud providers rather than AWS.