Amazon To Refresh Alexa With AI, Charge Monthly Subscription – Report

Amazon's Echo Spot smart speaker. Amazon

Alexa voice assistant to be upgraded with AI capabilities, and users charged a monthly fee not included in Prime, report states

Amazon is reportedly planning a major overhaul of its Alexa voice assistant, amid growing competition from conversational AI models.

CNBC, citing people with knowledge of Amazon’s plans, reported that the e-commerce giant plans to unveil a upgraded version of its decade-old voice assistant this year and will charge a monthly fee.

The Alexa voice assistant has reportedly fallen out of favour with Amazon’s current management under CEO Andy Jassy, despite it being heavily championed by former CEO and founder Jeff Bezos.

Alexa assistant

The voice assistant has never managed to create an ongoing revenue stream for Amazon.

Indeed, it has been suggested that just about every plan to monetise Alexa had failed, with one former employee previously branding Alexa “a colossal failure of imagination,” and “a wasted opportunity.”

Since its launch in 2014, Amazon made huge investments in Alexa and at one point, Amazon had 5,000 people working on Alexa and Echo.

But voice assistants such as Alexa and Apple’s Siri, used mostly to answer questions about the weather, play music, or set timers, are now facing a harsh new reality due to advanced AI models.

Last week, OpenAI for example 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 has also launched a similar generative-AI-powered voice feature for Gemini.

Alexa overhaul

Now according to the CNBC report, Amazon is upgrading Alexa with generative artificial intelligence, and will use its own large language model, Titan, in the Alexa upgrade.

Amazon also plans to charge a monthly subscription fee to offset the cost of the technology.

However it is reported that Amazon’s subscription for Alexa will not be included in the $139-per-year Prime service.

According to the source, Amazon has yet to decide the final pricing.

Amazon declined to comment on its plans for Alexa, CNBC reported.

There is also no word on whether Amazon plans to maintain a free ‘dumbed down’ version of Alexa, for Echo device owners.

As of 2023, Amazon said it had sold more than 500 million Alexa-enabled devices, which gives the company a massive consumer foothold, but which it has failed to turn into a revenue generator.

Alexa’s future

Indeed, the sources told CNBC that CEO Andy Jassy’s lack of regard for the Alexa division was enhanced recently when he (as an avid sports fan) asked Alexa the live score of a recent game.

According to a person in the room, Jassy was openly frustrated that Alexa didn’t know an answer that was so easy to find online.

Amazon has been heavily restructuring its Alexa division under Jassy. In November 2023 Amazon had axed more jobs within its Alexa division, and also axed a number of unspecified initiatives within the unit.

Amazon Astro for Business. Image credit: Amazon
Amazon Astro for Business. Image credit: Amazon

That was on top of the 27,000 jobs that Amazon had already axed since November 2022.

Indeed, such has been the cuts to the Alexa voice assistant division, it has previously prompted concern about the future of Echo devices and the Alexa voice assistant.

So much so that David Limp, who used to be Amazon’s senior vice president of Devices & Services – the division responsible for the Kindle, Echo hardware line and the Alexa personal assistant business – had to reassure concerned Alexa customers when Amazon implemented those job cuts.

David Limp, senior vice president of Devices & Services, Amazon.
Image Credit Amazon

But matters were not helped in August 2023, when David Limp announced he was stepping down as boss of Amazon’s Devices & Services unit.

He was replaced by Microsoft’s former product boss, Panos Panay.

Panos Panay.
Image credit Panos Panay

Amazon has meanwhile has spent a total of $4 billion backing AI startup Anthropic.