Amazon on Wednesday, February 26, unveiled the long-awaited overhaul of its Alexa digital assistant, for access to which the company will charge a monthly subscription fee.
The revamped service is called Alexa+. The company’s product is powered by generative artificial intelligence. This was announced at an event in New York by Panos Panay, the firm’s senior vice president of devices and services.
For the first time, Amazon, which is an e-commerce giant and one of the largest players in the global technology sector, will charge for access to the updated digital assistant. The corresponding service will be available to consumers when paying in the amount of $19.99 per month. There is also free access to Alexa+ for Amazon Prime members. It is worth noting that the overhaul service will be launched in early access next month.
Panos Panay stated that new technologies come from time to time that change everything. In this context, it was separately noted that large language models enter the stage and fundamentally change the way people think about artificial intelligence.
Alexa+ can buy concert tickets, order groceries, book dinner reservations, and give recipe suggestions tailored to specific members of the user’s family, among other tasks. The digital assistant can also read study guides, and then quiz customers on the answers. Moreover, Alexa+ can organize handwritten documents and recall information from them.
Panos Panay stated that the digital assistant will learn the rhythm of users’ lives and will take action with them.
Alexa+ will work on almost every Alexa device the company has shipped. This was reported by Panos Panay. At the same time, it’s worth noting that every Alexa+ demonstration that Amazon has conducted has been on the Echo Show, a voice-controlled touchscreen display.
Daniel Rausch, Amazon’s vice president of Alexa and Fire TV, said that as part of the upgrade, the digital assistant has gone under a complete re-architecture. It was also noted that it’s not as simple as taking a large language model and jacking it to the original Alexa. Moreover, Daniel Rausch stated that Alexa+ uses a wide range of state-of-the-art training models from multiple vendors. In this case, it refers to Amazon’s own set of Nova models and models developed by third parties such as artificial intelligence startup Anthropic backed by the e-commerce giant.
The company focuses on the fact that Alexa is not only a useful tool for questions and answers but also a tool that performs actions on behalf of the customer as an agent. It is worth noting that recently there has been an increase in the number of firms that develop machine intelligence agents, which are more than text and image generators.
Amazon demonstrated how Alexa+ is researching and scheduling oven repair services. The company said that for such tasks, users can leave the digital assistant to complete the request, and the service will come back to them with answers that will be sent via the Alexa app or a text message sent to their phone.
Ann Wessing, Amazon’s worldwide general manager and product marketing director for Alexa and Echo, in a demonstration following the event, stated that the Alexa+ rollout will begin with Echo Show devices. It was also noted that the best digital assistant experience is on a touchscreen Echo device.
Recently, Amazon has faced growing pressure to upgrade Alexa. The corresponding tendency has intensified since OpenAI introduced ChatGPT in November 2022. This virtual product has impressed consumers with its abilities related to processing huge amounts of information, including as part of an analytical approach to the relevant process, and generating original content based on user prompts. ChatGPT, among other things, can perform complex functions such as writing fiction and coding software. Against the background of the functioning of this chatbot, Alexa and other voice assistants, similar to the mentioned development from Amazon, began to seem outdated. By the very fact of its existence, the corresponding configuration of technological reality has raised the issue of the need to modernize digital assistants. In this context, it is worth noting that technological progress is overall a continuous process. For the mentioned reason, modernization can be described as a kind of permanent condition for companies to move forward. Those firms that ignore the specified axiom of technological evolution are guaranteed at some point to find themselves on a kind of symbolic sidelines of development, which in terms of specific consequences will mean a drop in financial performance and loss of market positions.
Business giants like Amazon are aware of the mentioned unspoken rule. Currently, technology companies are actively integrating artificial intelligence into their products. AI can both enhance the already existing abilities of the mentioned products and bring new functions. In the context of interaction with consumers, artificial intelligence is a source of improvement in the relevant process. AI as a cognitive system can better understand the needs of users and predict their behavior within the framework of actions in the digital environment. Currently, there is an increase in competition between artificial intelligence developers. The corresponding process is likely to intensify as the AI industry is on a high-intensity growth trajectory. Also, in this case, the impact factor is persistently high consumer demand. The competition process involves not only those companies that develop artificial intelligence systems but also those firms that elaborate products powered by AI.
Jitesh Ubrani, a research manager overseeing wearables and other devices at IDC, said the subscription fee for Alexa could help Amazon offset the high costs of developing machine intelligence and make the digital assistant a more profitable business. It is worth mentioning that in May, the media published information that the company is considering charging a monthly subscription fee for using the specified product as part of an effort to make money on the service.
Jitesh Ubrani noted that high development costs are typical for any existing artificial intelligence system. According to the expert, Amazon will need to carefully approach the paid Alexa service. In the relevant context, it was noted that an important goal is to avoid alienating Prime subscribers who already pay $139 for the loyalty membership. Jitesh Ubrani said that the company will have to show what the new Alexa is capable to justify the subscription. OpenAI offers consumers a free version of ChatGPT. Moreover, in this case, provides a premium subscription for $20 per month. The paid version of the Claude chatbot from Anthropic also costs $20 per month.
Jitesh Ubrani noted that Amazon’s audience is already very large, so even transitioning a small portion of users to a subscription can generate a fair amount of money.
Alexa was launched in 2014. The project of this digital assistant has become what can be called an object towards which the technological enthusiasm of Amazon founder Jeff Bezos was directed. Mr. Bezos envisioned that one day the mentioned product would resemble an all-knowing computer, similar to the one from Star Trek. It’s worth noting that Amazon has quickly taken a leading position in the voice software area. According to the company, more than 500 million Alexa devices were sold worldwide in 2023. At the same time, the digital assistant has not become as transformative as Jeff Bezos expected. Forrester Research data shows that most consumers use the mentioned category’s products for very simple tasks, including checking the weather or playing music, and primarily via smartphones rather than smart speakers.
It is also worth noting that Alexa continues to be unprofitable. Amazon has never charged for access to the mentioned digital assistant, instead infusing it into its line of smart speakers, tablets, and other devices priced at or below their cost of production. The company was betting that the experience of interacting with Alexa would encourage consumers to spend money on its other products and services. However, this expectation remained a hope that did not become a fact of what can be called a practical reality, measured by single-digit indicators.
Amazon has lost tens of billions of dollars in its devices business, which includes the Echo, Kindle, Fire TV, and other products. The relevant information was published by the media in July.
After OpenAI launched ChatGPT, Amazon began working to overhaul Aexa with generative artificial intelligence technology to make it more conversational and useful. The company demoed a souped-up digital assistant in 2023. It’s worth noting that this new version of Alexa called Let’s Chat has not been launched to the public.
Amazon chief executive officer Andy Jassy has closely scrutinized, or in some cases discontinued, some unproven or money-losing projects of the company. That included the devices and services unit, which houses Alexa. This unit has undergone two rounds of layoffs as part of the company-wide job cuts in 2022 and 2023. As part of these actions, more than 27,000 Amazon employees were laid off.
As we have reported earlier, Amazon Presents New Slate of AI Models.
