Amazon may charge fee for next version of Alexa to revive AI business

Amazon is considering a monthly fee of around $5 for offering the next version of Alexa service in order to make more revenue, Reuters news report said.

Amazon Alexa AI

Amazon has generated total sales of $574.8 billion (up 12 percent) and net income of $30.4 billion in 2023. Amazon does not reveal its sales revenue from Alexa-enabled devices. Amazon has earlier lost around $10 billion from Alex business, according to media reports.

Amazon, which has reached the milestone of selling more than 500 million units of Alexa-enabled devices in early 2023, is set to include a conversational generative AI for the next version of Alexa as part of its revival strategy.

Amazon has dubbed the new voice assistant “Remarkable Alexa,” as part its Banyan project.

Amazon CEO Andy Jassy is aiming to launch the new version of Alexa this year in order to revive the business.

Andy Jassy, in an April letter to shareholders, has promised an intelligent and capable Alexa, without providing additional details.

“We have already integrated generative AI into different components of Alexa, and are working hard on implementation at scale — in the over half a billion ambient, Alexa-enabled devices already in homes around the world — to enable even more proactive, personal, and trusted assistance for our customers,” Amazon spokeswoman said in a statement.

Recently, Amazon introduced AI-powered search for Fire TV devices. Fire TV’s new AI-enhanced search combines artificial intelligence with Fire TV’s entertainment content and app library, enabling customers to find personalized TV show and movie recommendations using natural language.

Alexa service — which provides spoken answers to user queries, like the local weather, and can serve as a hub to control home appliances – was a pet project of Amazon founder Jeff Bezos.

Amazon aims to offer better generative AI service as compared with main competitors such as Google, Microsoft, and OpenAI. AI chatbots from Google, Microsoft, and OpenAI can respond instantaneously with full sentences to complicated prompts or queries.

iPhone Apple is also pushing ahead with its AI strategy. Apple will be updating its Siri voice activated software embedded in iPhones to include more conversational answers.

The paid version of Alexa could perform more intricate tasks such as composing a brief email, sending it and ordering dinner for delivery from Uber Eats, all from a single prompt. It could eliminate the need to repeatedly say “Alexa” during a conversation with the software and offer more personalization.

Amazon is already aiming to supercharge the home automation offered through Alexa. Alexa can wirelessly connect to smart devices so that they can be controlled by voice, allowing a user to turn the lights on every day at 8 pm.

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