Amazon is considering a $5 monthly fee for Alexa artificial intelligence

Amazon’s ongoing efforts to boost revenue will see the e-commerce giant charge a monthly subscription fee for its Alexa voice assistant.

Reuters, citing people with direct knowledge of the company’s plans, reported that Amazon plans to overhaul its decade-old, loss-making Alexa service to include conversational, generative artificial intelligence with two tiers of services.

There was a monthly fee of around $5 for access to the better version.

This isn’t the first time an Alexa subscription fee has been advertised. Last month, CNBC, which cited people familiar with Amazon’s plans, reported plans to unveil a version of Alexa with improved artificial intelligence in 2024 that will charge a monthly fee.

Amazing Alexa

According to a Reuters report, Amazon’s project to monetize Alexa is known internally as “banyan,” a reference to the sprawling ficus trees.

Amazon has dubbed its new voice assistant “Alexa Extraordinaire,” people told Reuters.

The sources include eight current and former employees who worked on Alexa, as noted by Reuters, with employees being pressured to meet an August deadline to deliver an improved version of Alexa.

Three of the people reportedly noted that CEO Andy Jassy has a personal interest in reviving Alexa. In an April letter to shareholders, Jassy promised a “more intelligent and capable Alexa,” without providing additional details.

The company’s plans for Alexa, including pricing and launch dates, could be changed or canceled depending on Project Banyan’s progress, the people warned.

“We have already integrated generative AI into various Alexa components and are working hard to roll out at scale – to the more than half a billion Alexa-enabled devices already in homes around the world – to enable even more proactive, personal and trusted assistance for our customers ”an Amazon spokeswoman told Reuters in a statement.

“Desperate Try”

Some Amazon employees who worked on the project told Reuters that Banyan represents a “desperate attempt” to revive a service that has never turned a profit and has been stalled amid a surge in competing generative artificial intelligence products over the past 18 months.

These people said senior management told them this year was a critical year for the service to finally demonstrate it could generate significant sales for Amazon, Reuters reports.

Amazon is working to replace the current free version of what it internally calls “classic Alexa” with an AI-powered version and yet another tier that uses more powerful AI software for more complex queries and suggestions that people would have to pay for, some said, to access it is at least $5 per month.

Amazon was also considering a price tag of around $10 a month, sources told Reuters.

People say there will be no tie-in to the $139-a-year Amazon Prime membership.

Jassy’s frustrations

The “classic” voice assistant Alexa has reportedly fallen out of favor with Amazon CEO Andy Jassy, ​​even though it was heavily supported by former CEO and founder Jeff Bezos.

The truth is that the voice assistant has never been able to provide Amazon with a consistent source of revenue.

Indeed, it has been suggested that almost every plan to monetize Alexa has failed, with one former employee previously labeling it a “colossal failure of imagination” and a “wasted opportunity”.

Since its launch in 2014, Amazon has made huge investments in Alexa, and at one point Amazon had 5,000 people working on Alexa and Echo.

But voice assistants like Alexa and Apple’s Siri, primarily used to answer questions about the weather, play music or set timers, are now facing a harsh new reality due to advanced artificial intelligence models.

Andy Jassy’s disrespect for Alex’s division deepened recently when he (as an avid sports fan) asked Alexa about the live score from the last match.

According to a person in the room, Jassy was openly frustrated that Alexa didn’t know the answer that was so easy to find online.

Alexa restructuring

Andy Jassy has heavily restructured Amazon’s Alexa division.

In November 2023, Amazon cut more jobs in its Alexa division and also scrapped a number of unspecified initiatives within the unit.

This is in addition to the 27,000 jobs Amazon has already cut since November 2022.

Indeed, the cuts to the Alexa voice assistant division have been such that they have previously raised concerns about the future of Echo devices and the Alexa voice assistant.

So much so that David Limp, who was senior vice president of Amazon Devices and Services – the division responsible for the Kindle, Echo and Alexa hardware lines – had to reassure concerned Alexa customers when Amazon implemented these waivers.

However, matters did not improve in August 2023, when David Limp announced that he was stepping down as head of Amazon’s devices and services division.

Limp then became the head of the Jeff Bezos Blue Origin space venture.

Limp was replaced by former Microsoft product chief Panos Panay as head of Amazon’s devices division.

Meanwhile, Amazon has spent a total of $4 billion to support artificial intelligence startup Anthropic.