According to the financial news app Zhitong Finance, informed sources familiar with Amazon's plans revealed that the company is undergoing a major transformation of its Alexa voice assistant service, which has been in a loss-making state for the past decade, by integrating it with generative AI. This will involve incorporating a two-tier conversational generative artificial intelligence service, equivalent to a voice version of ChatGPT. Amazon's management is considering a monthly fee of around $5, or even possibly $10, although this has not been confirmed yet. Subscribers will have access to a higher-level version of the Alexa intelligent voice service after payment. This move signifies that Amazon's long-standing free Alexa voice assistant business, which has been in a loss-making position, may transition into a subscription-based payment era.
Internally, this project is referred to as &#34;Banyan,&#34; named after the sprawling banyan tree. Since its launch in 2014 alongside the Echo series of speakers, this project will mark the first major overhaul of Amazon's classic voice assistant, Alexa. Sources indicate that Amazon has named this new voice assistant &#34;Extraordinary Alexa.&#34;
Media reports citing informed sources revealed that Amazon has instructed employees to prepare the latest version of Alexa combined with generative AI dialogue boxes by the end of August deadline. Amazon CEO Andy Jassy is reportedly very interested in seeing Alexa revitalized. In a letter to shareholders in April, Jassy pledged to introduce a &#34;smarter and more powerful Alexa,&#34; but did not provide further details.
However, sources emphasize that Amazon's plans for Alexa, including pricing and release dates, may change or be canceled based on the progress of the &#34;Banyan project.&#34;
An Amazon spokesperson stated in a release, &#34;We have integrated generative artificial intelligence technology into various components of Alexa and are working hard to implement and deploy it on a large scale—there are already over 500 million Alexa-enabled devices in homes worldwide, providing our customers with a more proactive, personalized, and reliable voice assistant.&#34;
This service provides users with voice responses to queries, such as local weather, and can also serve as a voice call center to control household appliances. This voice assistant service is one of Amazon founder Jeff Bezos' favorite projects, envisioning technology that can mimic the fictional voice computer in the &#34;Star Trek&#34; series.
In the AI chatbot field, Amazon is unwilling to fall behind Google and Microsoft
For Amazon, keeping up with competitors in the generative artificial intelligence field is crucial, as AI chatbots launched by Google, Microsoft, and OpenAI, such as OpenAI's ChatGPT and Google's Gemini, have garnered greater user attention. These AI chatbots can provide complete responses to complex prompts or queries almost instantly. Microsoft, leveraging its significant stake in OpenAI, has embedded the pride of OpenAI, the GPT-4 AI large model, into flagship applications such as the Office suite and the Microsoft Azure cloud platform
Becoming a global leader in AI application terminals, performance and stock prices have been continuously growing since 2023.
Compared to OpenAI's ChatGPT and Google's Gemini, Amazon has not made significant achievements in this general AI chatbot field. Amazon previously launched the AI chat assistant Amazon Q, which focuses on quickly accessing various functions of AWS cloud services rather than a general AI chatbot like ChatGPT. Amazon Q is a comprehensive productivity assistant launched by Amazon AWS, designed for developers on the AWS platform. Through a chatbot interface, Amazon Q provides access and scheduling management capabilities for data, code, and infrastructure on the AWS platform and its connected systems. Amazon Q can help enterprise customers quickly obtain relevant answers to urgent questions, solve problems, generate content, and quickly respond to customer inquiries using data and expertise from enterprise information repositories, related code, and enterprise systems.
ChatGPT was released at the end of 2022, triggering a global investment frenzy in AI companies, leading to chip giant NVIDIA (NVDA.US) surpassing Amazon and Google by a large margin in total market value, and briefly becoming the world's most valuable listed company this week. NVIDIA's AI GPUs such as H100/H200/GB200 are the core hardware driving heavy-duty AI applications like ChatGPT and Sora. Since 2024, the computing power demand for various AI applications like ChatGPT, Claude, and Sora, as well as the computing power demand for large-scale AI model iterative training, has continued to grow explosively, stimulating a sharp increase in demand for NVIDIA AI GPUs and server AI chips, with Amazon AWS being one of NVIDIA's core customers.
In addition to cloud computing giants Google, Microsoft, and Amazon, consumer electronics giant Apple Inc. (AAPL.US) is also advancing its own artificial intelligence strategy, including Apple Intelligence embedded in the iPhone, which significantly enhances the intelligence level of the Siri voice assistant, providing more comprehensive and complex conversational answers.
Some Amazon employees involved in the project have stated that the &#34;Banyan&#34; project represents a &#34;desperate attempt&#34; to revitalize the voice assistant service, which has never been profitable and has been caught off guard in the competitive rise of AI products over the past 18 months. These employees have been told by senior management that this year is a crucial year for Amazon, and the voice assistant Alexa must ultimately prove that it can bring meaningful sales to Amazon.
Amazon's classic voice assistant Alexa has long been accessed mainly through Amazon TV and Echo speaker devices, mainly used for setting timers, quickly checking the weather, playing music, or answering simple questions
Amazon once hoped to increase its e-commerce sales through this service, but this hope was dashed mainly because users prefer to see the actual products they are buying first for comparison.
Amazon cut thousands of jobs in its voice assistant Alexa department at the end of 2023 as part of a major restructuring following the loss of momentum in e-commerce boom driven by the COVID-19 pandemic, while investing more resources into the generative AI field.
&#34;A Battle of 'Must Win'&#34;
Insiders say that Amazon aims to embed generative artificial intelligence, where Alexa customers can ask for shopping advice, such as what gloves and hats to buy for a mountain trip, similar to the text-based service Rufus launched earlier this year on its website.
Insiders say that senior management emphasized that 2024 is a &#34;must-win&#34; year for Alexa, and this Alexa campaign must be won. Alexa, like Amazon Prime members, Kindle, and Fire devices, is one of the brands most closely related to the Amazon platform.
However, the AI version of the service showcased in September last year has not been released to a wider audience yet, while competitors have rolled out multiple updates to their chatbots. In the demo, Alexa lost its robotic tone and answered questions like the start time of a football match. &#34;You can now have almost human-like conversations with Alexa,&#34; promised Dave Limp, Amazon's former hardware chief, at the time. But he later left the company.
Insiders indicate that Amazon is working to replace the current free version &#34;Classic Alexa Voice Assistant&#34; with a streamlined AI-driven first-tier version, while another tier uses more powerful AI software to handle more complex queries and prompts, requiring users to pay at least $5 per month. They mention that Amazon is also considering a price of around $10 per month. Insiders stress that Amazon is currently not considering linking it to the $139 annual Prime membership.
As envisioned, the paid version can perform more complex tasks, such as writing short original emails, sending emails, and ordering from Uber Eats conveniently, all through a prompt. They mention that it can also eliminate the need to repeatedly say &#34;Alexa&#34; when interacting with the software and provide more personalized AI services.
Amazon has also faced some challenges in developing AI and other areas, such as illusions - false or misleading information generated by the software, and low morale among department employees.
Insiders say that Amazon also plans to significantly enhance the home automation services provided by Alexa, embedding more advanced AI service capabilities in the process. Alexa can now wirelessly connect to so-called smart home devices, allowing them to be controlled by voice, for example, users can turn on the porch light at 8 p.m. every night with just a short phrase
Insiders say that the latest Alexa embedded with generative AI technology can not only smoothly complete the above tasks, but also deeply learn some of the user's personal habits. This way, it can turn on the TV, play the user's favorite show every week, or open the coffee pot after the user's morning alarm goes off. All of these are achieved through Amazon's &#34;Routines&#34; feature for Alexa. However, the implementation of such services will require customers to purchase more smart home devices that support Alexa.
Insiders say that Amazon has been developing more smart devices since last year, hoping to introduce this intelligent service into more rooms, such as home energy trackers and carbon monoxide detectors that support the Alexa voice assistant

OpenAI

The company is planning a major transformation of its Alexa voice assistant service, which has been in a loss-making state for the past decade, to fully incorporate a two-tiered conversational generative AI service - equivalent to a voice version of ChatGPT

"Amazon's version of ChatGPT" is ready to go! AI-integrated Alexa is expected to enter the "subscription era"