Amazon Alexa to get a generative AI upgrade later this month
Amazon pioneered the “digital assistant” space with Alexa, which had cheap but powerful hardware – smart speakers, smart displays, and tons of accessories to go with it. But it has caused Alexa to stagnate for several years, both in terms of features and profitability. Now Amazon will leverage the huge improvements that generative AI has brought to make Alexa smarter. According to insiders who spoke to Reuters, this will be done in collaboration with Anthropic, the makers of Claude AI (Amazon has invested $8 billion in Anthropic).
A significant improvement in the new Alexa will be its ability to handle multiple prompts. Unlike the current version, which is mostly limited to simple one-off commands. In addition, the new Alexa will also remember your preferences. This will come in handy if you ask it to play music or recommend a restaurant, for example. As an example of the multi-prompt capability, experts explained that you can ask the new Alexa to order a burger and then have the option to change the ingredients before the order is sent. Additionally, the generative AI model will be able to act as an agent, that is, act on behalf of the user without the user having to constantly intervene.
It probably won’t be called “New Alexa,” by the way. Internally, the improved variant is referred to as “Banyan” and “Remarkable Alexa,” although it’s not clear if either of these names will be the market name. “Classic Alexa” will remain available and free, although Amazon has stopped developing new features for it.
Amazon Alexa AI to cost $5 to $10
Amazon reportedly considered charging $5 to $10 per month for the new Alexa, but may have made it available for free to a limited number of users at first. Bank of America analysts estimate that the new service can bring in $600 million per year if 10% of Alexa’s current active users sign up for a $5-per-month subscription. That will certainly help with Alexa’s profitability issues.
Insiders report that Amazon executives will meet on February 14 to decide how to proceed. If they give the green light, an event will be held on February 26 to focus on Alexa. The event will feature Panos Panay of Microsoft Surface and Windows 11 fame.
