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Amazon's Alexa division has not been profitable and has lost billions of dollars since its launch in 2014 – but artificial intelligence could help change that.
According to a Reuters report on Friday, citing eight sources “with direct knowledge” of Amazon's plans, including current and former Amazon employees who worked on the voice assistant, Amazon is considering hiding the higher-performance AI-powered Alexa behind a subscription paywall.
According to Reuters, Amazon is currently working on upgrading the free version of Alexa to one with AI capabilities and plans to add a higher subscription tier of the voice assistant that can handle more complex AI prompts.
The two Alexa levels are known internally as “Remarkable Alexa” and “Classic Alexa.” Sources told Reuters that Amazon was considering a subscription to “Remarkable Alexa” for $5 to $10 per month to differentiate the two.
According to the report, “Classic Alexa” will remain free.
If the subscription is implemented, it would be the first comprehensive redesign of the voice assistant since its launch by Amazon.
Amazon Echo Show 8 previews new Alexa AI features. Image credit: Al Drago/Bloomberg via Getty Images
Amazon's Echo smart home devices with Alexa have been surprise hits since their launch, but a 2022 BI report showed that despite their best-selling qualities, they were mostly sold at cost.
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Amazon previewed a generative AI version of Alexa back in September, demonstrating how the voice assistant can speak with more personality and take more context into account.
Amazon said at the time that it had sold more than half a billion devices with Alexa and that AI features “will soon be available to Alexa customers in the U.S.”
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