Amazon is about to release a paid Alexa with AI – it should compensate for the losses from Echo devices

In April 2024, Amazon CEO Andy Jassy promised shareholders a “smarter, more capable Alexa.” Amazon’s plan to launch a paid version of Alexa is an attempt to offset the $25 billion in losses its device business suffered between 2017 and 2021. Sales of Alexa with AI may begin soon, with a monthly subscription costing $10. According to rumors, developers doubt the success of the updated Alexa.

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According to insider information, the division is approaching the deadline for launching a subscription, although “the technology is not there yet.” Amazon’s plans to charge for an improved version of Alexa were first announced last year. But the company is reportedly lagging far behind—last month, a Fortune report said Alexa isn’t even close to “fulfilling Amazon’s mission to be the world’s best personal assistant” as the team faces technical and organizational challenges.

Alexa is a pet project of Amazon founder Jeff Bezos, who came up with the technology by imitating the fictional voice computer from the television series Star Trek. Alexa can be accessed through Amazon TVs and Echo smart speakers. Alexa is mainly used as an alarm clock, weather forecast, playing music and answering simple questions. Amazon’s hopes of boosting e-commerce sales through the service have been dashed.

The new version of Alexa is expected to be enhanced with generative AI capabilities that will allow it to perform multiple tasks with a single prompt and create sequences of actions. “We have already integrated generative AI into various Alexa components and are working diligently to deploy them across more than half a billion Alexa-enabled devices in homes around the world to provide even more proactive, personalized and reliable assistance to our customers,” the spokesperson said. Amazon.

The company doubts that customers will be willing to pay for an Alexa AI subscription on top of Amazon Prime’s $139-a-year membership fee. Since basic versions of AI assistants like ChatGPT, Google Gemini, and soon Siri don’t cost anything to use, Amazon may find it difficult to charge for Alexa.

It’s critical for Amazon to keep up with competitors in generative AI, as Google, Microsoft and OpenAI have leapt ahead with chatbots that instantly answer complex questions in natural language. People with knowledge of the matter claim that Amazon is suffering from “repeated false starts” in development, problems with AI hallucinations and poor employee morale in the division.