“If this fails to get revenue, Alexa is in trouble.”
A dismal picture is created by a comment from an unidentified Amazon employee that appeared in a Business Insider piece on Wednesday. For Amazon to generate cash in ways that its voice assistant has never before, the planned subscription version of Alexa is essential.
Ars’ request for a statement from Amazon regarding the report was denied. However, anyone who has followed voice assistants over the past year or more could have said the opening line of this piece. Since users typically use voice assistants for simple inquiries like checking the weather rather than for transactions, voice assistants have struggled to generate revenue.
Amazon revealed plans to release a generative AI version of Alexa, which it said will eventually demand a subscription, in an effort to increase interest in and usage of the device.
This leads to the question: Would you pay money to utilise Alexa? It will be difficult for Amazon to convince users to use Alexa differently and to suddenly pay a monthly fee in order to support that extraordinary behaviour.
Workers at Amazon appear to recognise this challenge. According to Insider, which quoted an unnamed Amazon employee, “some were questioning the entire premise of charging for Alexa.” People who currently subscribe to an Amazon service, like Amazon Music, for instance, might not be willing to pay extra to use the updated version of Alexa.”
Subscription-based Originally scheduled for release in June, Alexa
The date of Alexa’s generative AI release has not been made public by Amazon. On June 30, however, according to Insider’s report, which cited “internal documents and people familiar with the matter,” Amazon is set to launch its subscription plan. Plans for the “Alexa Plus” product, which Insider claims would be based on “Remarkable Alexa” technology, may, however, be postponed in light of several development challenges.
The Remarkable Alexa technology, which 15,000 clients have reportedly been demoing, is reportedly successful at conversational tasks but is “deflecting answers, often giving unnecessarily long or inaccurate responses.”
Then-SVP of devices and services at Amazon, David Limp, showed in September how Alexa could comprehend more complex purchases. For example, Alexa could understand numerous requests for various apps with a single spoken phrase and could operate without the need for the “Hey Alexa” prompt.
The new Alexa still didn’t live up to the quality standards expected for Alexa Plus, according to Insider, who also noted the redesign’s technological challenges and complexity.
“Legacy constraints”
The story claims that individuals who worked on the original Alexa insisted on applying their existing code for the free version of the voice assistant to the premium one, leading to bloated technology and “internal politics.”
But unlike the enormously huge language model of generative AI Alexa, the original Alexa is built on a natural language model with numerous sections accomplishing multiple tasks.
Now, in order to get over the “legacy constraints” of the current Alexa, generative AI Alexa is apparently migrating to a new tech stack, which could cause delays.
An inarguable need for “remarkable”
For Alexa to become a reliable source of income, Amazon needs to take some action. Alexa was predicted by Insider to cost Amazon $10 billion by the end of 2022. The company proceeded to lay off a large number of employees in the months that followed, the most recent of which was in November 2023 and was purportedly directed at the devices and services division as well as some of the AI team, according to an email that Business Insider purportedly seen.
Because of this, Alexa is likely under more pressure from fewer people who are attempting to create a commercial for Alexa. That’s a big order, given that Amazon still hasn’t figured out how to encourage users to use Alexa in ways that generate money.
Beyond the financial issues the voice assistant has always had, the cost of researching and developing generative AI is very high. According to Limp’s statement to Bloomberg in September, “the cost for inference of the model in the cloud is substantial.” At the same time, Anthropic stated that Amazon will acquire a minority stake, and Amazon pledged to invest up to $4 billion in the development of big language models.
Limb also told Bloomberg that Alexa “has to be remarkable” before Amazon could charge for it, but that charging for the voice assistant was “not decades away,” possibly alluding to the moniker “Remarkable Alexa” featured in Insider’s report.
However, if the June goal date is accurate, then maybe six months ahead of schedule is too soon. It is imperative that Amazon’s use of generative AI meets, if not exceeds, expectations. Users will not commit time and responsibilities to Amazon’s generative AI if it means putting up with bugs, errors, and inconveniences on top of subscription costs, since they are already reluctant to utilise Alexa for difficult tasks. Not to mention the privacy issues that Alexa has raised in the past, present, and future.
Nevertheless, since Amazon is catching up, Alexa lacks the luxury of time. While Amazon isn’t out of the game entirely, a hasty and subpar launch might make it irrelevant. The Alexa team also has a challenging task because paid voice assistants are already very difficult to sell.