Amazon.com, Inc. AMZN has been working on a premium version of its AI-powered voice assistant, Alexa. However, the project might be getting beleaguered by internal disagreements and technical hitches, possibly leading to further postponements.
What Happened: The forthcoming subscription service, provisionally dubbed “Alexa Plus,” intends to deliver superior, personalized AI technology.
However, despite conducting tests with 15,000 external customers, the new Alexa’s performance has been internally termed as underwhelming, frequently dispensing inaccurate information, reported Business Insider earlier this week.
While Alexa gained initial success, the voice assistant has had difficulties in establishing a robust business model which led Amazon to downsize and lay off employees last year. The proposed subscription plan, supported by an advanced Alexa version, is the latest attempt by Amazon to resurrect the voice technology once considered crucial to its future.
This plan has been introduced at a crucial juncture for Alexa as it lags behind its rivals like Alphabet Inc.'s GOOG GOOGL Google Assistant and Apple Inc. AAPL Siri.
Google Assistant is estimated to have 88.8 million users this year, trailed by Siri’s 84.2 million, while Alexa lags with a projected 75.6 million users, the report noted.
In-house, the new Alexa’s performance, dubbed “Remarkable Alexa,” is reportedly not meeting Amazon’s expectations. In tests with 15,000 external customers, Remarkable Alexa, despite being conversational and informative, often evaded answers, providing lengthy or incorrect responses.
The report stated that the device also needs to enhance its ability to answer ambiguous customer requests requiring multiple services’ involvement.
Amid these challenges, there is an escalating debate over the project’s course. Many question the entire premise of charging for Alexa, particularly those already subscribed to existing Amazon services. “There is tension over whether people will pay for Alexa or not,” an insider said.
See Also: Amazon Scores Big With Regional Sports Network Deal: Prime Video To Feature MLB, NBA, NHL Games
Why It Matters: Alexa’s trouble started long back. Just last year in June Amazon agreed to pay over $30M to settle allegations of spying on customers through Alexa.
Later in October, Alexa was criticized for disseminating false election information regarding to 2020 U.S. Presidential election.
In November 2023, it was reported that Amazon laid off several employees in its Alexa division, following a shift in focus toward generative AI.
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This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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