Amazon's Remarkable Alexa: What to Expect from the New AI Upgrade

Amazon.com, Inc. (AMZN) is preparing to unveil a significant AI enhancement to its Alexa voice assistant at a press event expected on February 26 in New York.

What to Know: The upgrade, internally dubbed "Banyan" or "Remarkable Alexa," has faced delays due to issues regarding the quality and speed of responses. A crucial meeting to decide on its readiness is set for February 14, as reported by Reuters.

This advanced version of Alexa is intended to facilitate better user interactions by allowing it to process several requests in succession, enabling it to act more like a personal agent for users rather than just responding to one query at a time.

Initially, Amazon plans to offer this upgraded service for free to a select group of users. However, there is consideration of introducing a monthly subscription fee between $5 to $10.

The current version, referred to as "Classic Alexa," will remain available at no cost but will not receive any new features, according to sources familiar with the situation.

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Importance of the Upgrade: Amazon’s extensive $8 billion investment in the AI startup Anthropic is expected to enhance the AI capabilities of the new Alexa.

This update is seen as a strategic move by Amazon to convert its large user base into paying customers and address the current unprofitability of the service. The Alexa division has been struggling with profitability issues, reportedly experiencing a loss of around $5 billion in 2022. A source at Bank of America noted that the success of "Remarkable Alexa" is vital; without strong subscription uptake, further cuts to investments could be imminent.

Recently, OpenAI’s ChatGPT has also launched into the virtual assistant arena with its "Tasks" feature, posing a challenge to established competitors like Amazon's Alexa, Apple's Siri, and Google's Assistant.

Apple Inc. (AAPL) has begun integrating "Apple Intelligence" into Siri, leveraging features from ChatGPT to improve its service.

Additionally, Alphabet Inc.'s Google Assistant got an upgrade in 2023 that incorporated features from its AI platform, originally known as Bard and now rebranded as Gemini.

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Upcoming Developments:

• Google is reducing its diversity hiring just like Amazon, according to internal memos.

Disclaimer: This content has been assisted by AI tools and reviewed by editors.

All market news and data are presented for informational purposes.

Amazon, Alexa, AI