Amazon to Update Alexa with AI and Start Charging for Voice Assistant

Amazon is preparing to give its voice assistant Alexa, which has been in operation for a decade, a major upgrade through the integration of generative artificial intelligence (AI). The company also plans to introduce a subscription fee for using the revamped Alexa, in an attempt to offset the cost of the technology, as reported by CNBC.

Alexa’s AI Overhaul

The revamped, more powerful version of Alexa is set to roll out this year. This upgrade is expected to strengthen its position in the market, competing with AI-based chatbots like Google’s and OpenAI’s services. Access to the updated Alexa will come with a subscription fee, the amount of which has yet to be disclosed by the company. Notably, the Alexa AI subscription will not be included in Amazon Prime, which currently costs $139 a year.

Last week, OpenAI presented its GPT-4o model which features an enhanced conversational ability that provides deeper content than Alexa. Google has launched a similar voice service based on Gemini. These innovations are seen as threats to voice assistants like Amazon’s Alexa and Apple’s Siri, whose capabilities are currently limited to setting timers and alarms, as well as delivering weather forecasts.

Revamping Alexa: A Priority

The CEO of Amazon, Andy Jassy, who succeeded Jeff Bezos in 2021, has expressed dissatisfaction with the current capabilities of Alexa. Recently, Jassy wanted to check recent sports scores but couldn’t get the answer from the voice assistant, despite the information being readily available online.

Amazon Echo devices with Alexa

In a letter to shareholders published in April, Jassy revealed Amazon’s plans to develop generative AI tools for its consumer business, including a “more intelligent and functional Alexa”. The revamped Alexa is expected to withstand competition from other big players in the AI industry and justify the resources and staff engaged in this domain. By 2023, Amazon had sold over 500 million devices with Alexa support, which has given the company and its product a solid customer base.

Challenges and Opportunities

Despite the plans to overhaul Alexa, Amazon’s team acknowledges the obstacles ahead. The AI industry is currently facing a shortage of skilled personnel, with OpenAI, Microsoft, and Google all competing to recruit from the same talent pool. The operational costs associated with AI are also substantial. According to one source, a single generative AI-based Alexa query would cost $0.02, making a reasonable subscription fee around $20 a month.

The stakes are high given Alexa’s user base, which numbers in the hundreds of millions of devices, presenting substantial financial prospects as well as increased accountability for AI errors or misunderstandings. To maintain its position, Amazon also needs to dispel the perception that it trails other companies in AI development.

Moreover, Amazon has invested an additional $2.75 billion in supporting AI startup Anthropic, which also received an investment from Google. Amazon’s Titan, a large language model, will be used in the revamped Alexa.

Staying Competitive in AI

Jeff Bezos, the former CEO of Amazon, has reportedly expressed concern about Amazon’s standing in the AI field. Despite no longer serving as CEO, he still participates in Amazon’s operations and has questioned why AI startups are choosing other cloud service providers over AWS.

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