Amazon.com, Inc. AMZN is gearing up to introduce a major AI upgrade to its Alexa voice assistant with a press event reportedly in New York on Feb. 26.
What Happened: Internally known as “Banyan” or “Remarkable Alexa,” the upgrade has experienced delays due to concerns about response quality and speed. A final decision on its readiness is anticipated on Feb. 14 during a “Go/No-go” meeting, reported Reuters.
The enhanced Alexa is designed to improve user interaction by processing multiple prompts in sequence and functioning as an “agent” for users. This represents a shift from the current version, which typically handles one request at a time.
Amazon intends to initially offer the upgraded service to a limited user base for free, although a monthly fee ranging from $5 to $10 was being considered.
The existing “Classic Alexa” will continue to be available at no cost, but it will not receive any new features, the report noted, citing one person familiar with the matter.
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Why It Matters: Amazon’s $8 billion investment in AI startup Anthropic will bolster the new Alexa’s AI capabilities.
This overhaul is viewed as a strategic effort to convert Alexa’s extensive user base into paying customers, addressing the current service’s lack of profitability, the report added.
The Alexa division has been grappling with profitability issues, reportedly incurring a $5 billion loss in 2022. According to Bank of America, the success of “Remarkable Alexa” is crucial, as further investment cuts could occur if the paid version does not gain traction.
Last month, OpenAI’s ChatGPT also entered the virtual assistant market with its “Tasks” feature, challenging established players like Amazon’s Alexa, Apple’s Siri, and Google’s Assistant.
Apple Inc. AAPL has chosen to integrate its “Apple Intelligence” into Siri, using the capabilities of ChatGPT.
In 2023, Alphabet Inc.'s GOOG GOOGL Google Assistant was upgraded with the features of Bard, which has since been rebranded as Gemini.
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