Amazon's Alexa Receives Major AI Upgrade for Prime Members

After facing multiple delays, Amazon has finally launched a significant generative AI update for its Alexa digital assistant. This upgrade can serve as a key revenue source for retailers since it features "agentic" capabilities, allowing Alexa to browse the web independently and even make purchasing decisions on behalf of users.

The new service is branded as "Alexa+" and is available for free to Amazon Prime members. However, non-Prime members will be charged a monthly fee of $19.99 (A$31.69). This move strengthens Amazon's position in the thriving smart home market, valued at A$2.17 trillion.

Amazon initially introduced Alexa back in 2014, taking cues from the AI-powered computer seen in Star Trek, which could be controlled via voice commands.

The motivation behind this generative AI model for Alexa comes amid losses amounting to an estimated A$37.99 billion from 2017 to 2021, primarily from the sale of devices like the Amazon Echo.

Through the subscription fees from Prime memberships or standalone subscriptions to Alexa+, Amazon aims to recover some of those losses.

To date, over 600 million Alexa devices have been sold, giving Amazon access to a vast audience of potential subscribers for its new AI-enhanced service.

A More Conversational Assistant

Alexa+ is designed to engage users in a more conversational manner as opposed to merely transactional interactions. Based on large language models, the service can 'understand' user intentions and respond similarly to a trusted assistant, accommodating incomplete thoughts and casual expressions, according to Panos Panay, Senior VP of Devices & Services at Amazon.

Amazon's recent launch of six foundational models for generative AI has been pivotal. Reports indicate that three of these models are significantly cheaper—at least 75 percent less expensive than the leading models in their category.

Alexa+ will utilize these advanced models along with others available through Amazon Bedrock, which features offerings from companies like Meta, Anthropic, Mistral AI, and DeepSeek.

Special Features of Alexa+

During the development of Alexa+, Amazon introduced a concept called "experts." This consists of various systems, capabilities, APIs, and guidelines designed to achieve specific customer tasks.

Using these experts, Alexa+ can manage smart home devices from brands such as Philips Hue and Roborock, make reservations, play music from services like Spotify or Apple Music, order groceries from Amazon Fresh, and even arrange delivery from Uber Eats.

A standout feature of this AI technology is its agentic capabilities, which allow Alexa+ to independently navigate the internet to complete tasks. For example, if a user tells Alexa+ that their oven needs fixing, it can search online, find a service provider, validate it, arrange the repair, and report back when it's done—all without requiring any intervention from the user.

Personalization and Competition

Alexa+ also offers personalized experiences, remembering details such as users' dietary preferences and past orders, which it utilizes when making reservations.

This advancement comes as competitors like OpenAI, DeepSeek, Gemini, and Musk's xAI are advancing their own generative AI technologies.

Amazon's CEO, Andy Jassy, highlighted the company's continuing collaboration with Nvidia. However, he noted that both internal developers and external customers are demanding improved price performance, which has led Amazon to develop its own custom AI chips. These advancements are crucial as generative AI applications scale and the requirements for low latency and cost-effectiveness become critical.

Many analysts predict that a significant portion of Amazon's planned capital expenditure of A$158.53 billion will go towards enhancing its AI technologies, especially computing infrastructure, with about a quarter allocated to its e-commerce segment.

Initially, Alexa+ will roll out in the U.S. over the next few weeks, with Australia expected to follow later this year as the service expands globally. The priority will be given to owners of Echo Show 8, 10, 15, and 21 devices during the early access phase before it becomes available on other devices.

AI, Alexa, Amazon