Amazon is planning a major revamp of its decade-old money-losing Alexa service to include a conversational generative AI with two tiers of service and has considered a monthly fee of around $5 to access the superior version, according to people with direct knowledge of the company's plans.
Known internally as “Banyan,” a reference to the sprawling
ficus trees, the project would represent the first major overhaul of the voice
assistant since it was introduced in 2014 along with the Echo line of speakers.
Amazon has dubbed the new voice assistant "Remarkable Alexa," the
people said.
The sources include eight current and former employees who
worked on Alexa and who spoke on the condition of anonymity because they were
not authorized to discuss confidential projects.
Amazon has pushed workers towards a deadline of August to
prepare the newest version of Alexa, three of the people said, noting that CEO
Andy Jassy has taken a personal interest in seeing Alexa reinvigorated. 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 release
dates could be altered or canceled depending on the progress of Project Banyan,
the people cautioned.
"We have already integrated generative AI into
different components of Alexa, and are working hard on implementation at
scale—in the over half a billion ambient, Alexa-enabled devices already in
homes around the world—to enable even more proactive, personal, and trusted
assistance for our customers," said an Amazon spokeswoman in a statement.
The service -- which provides spoken answers to user
queries, like the local weather, and can serve as a hub to control home
appliances – was a pet project of Amazon founder Jeff Bezos who envisioned a
technology that could emulate the fictional voice computer portrayed on
television’s Star Trek series.
For Amazon, keeping up with rivals in generative AI is
critical as Google, Microsoft and OpenAI have garnered more favorable attention
for their so-called chatbots that can respond almost instantaneously with full
sentences to complicated prompts or queries.
The release of ChatGPT in late 2022 set off a frenzy of
investing in AI firms and has pushed chipmaker Nvidia past Amazon and others by
market capitalization, briefly becoming the world’s second-most valuable
company.
Apple too is pushing ahead with its own AI strategy,
including updating its Siri voice activated software embedded in iPhones to
include more conversational answers.
Some of the Amazon employees who have worked on the project
say Banyan represents a “desperate attempt” to revitalize the service, which
has never turned a profit, and was caught flatfooted amid the rise of
competitive generative AI products over the past 18 months. Those people said
they have been told by senior management that this year is a critical one for
the service to finally demonstrate it can generate meaningful sales for Amazon.
Accessed primarily through Amazon TVs and Echo speaker
devices, Alexa is popular mostly for setting timers, quickly accessing the
weather, playing songs or answering simple questions. Amazon’s hopes for
goosing sales in its e-commerce operation through the service have fallen flat,
mostly because users like to first see the products they are buying for easy
comparison.
The Seattle retailer cut thousands of jobs in the unit in
late 2023, part of a major restructuring after a pandemic-fueled e-commerce
surge lost steam.
'MUST WIN'
With an embedded AI, Amazon expects Alexa customers will ask
it for shopping advice like which gloves and hat to purchase for a mountain
climbing trip, the people said, similar to a text-based service on its website
known as Rufus that Amazon rolled out earlier this year.
Some said they’ve been told by senior management that 2024
represents a “must win” year for Alexa, which along with the Prime membership
and Kindle and Fire devices are the brands most closely associated with Amazon.
But an AI-powered version of the service demonstrated in
September has yet to be released to the broader public while competitors have
pushed out multiple updates to their chatbots. In the demonstration, Alexa lost
its robotic tone and answered questions like the start time for a football
game. "You can now have a near-human-like conversations with Alexa,"
promised Dave Limp, Amazon's hardware chief at the time, who has since left the
company.
Amazon is working to replace what it refers to internally as
“Classic Alexa,” the current free version, with an AI-powered one and yet
another tier that uses more powerful AI software for more complicated queries
and prompts that people would have to pay at least $5 per month to access, some
of the people said. Amazon has also considered a roughly $10-per-month price,
they said.
There is no tie-in with Amazon's $139-per-year Prime
membership being considered, the people said.
As envisioned, the paid version could perform more intricate
tasks such as composing a brief email, sending it and ordering dinner for
delivery from Uber Eats, all from a single prompt, some of the people said. It
could also eliminate the need to repeatedly say "Alexa" during a
conversation with the software and offer more personalization, they said.
But the people said they struggled to see why customers
would be willing to pay for a service, even a revamped one, that is offered for
free today.
Amazon has also been plagued by false starts in developing
the AI and other challenges such as hallucinations – when software produces
false or misleading information – and poor employee morale in the division.
Some of Amazon’s plans for the service were previously
reported by Business Insider, including its struggles with the performance of
the underlying AI and its hopes for a paid service, however Reuters is first to
report the tiered pricing, internal deadline and potential monthly fee.
Amazon is also aiming to supercharge the home automation
offered through Alexa, the people said. Alexa now can wirelessly connect to
so-called smart devices so that they can be controlled by voice, allowing a
user to, for example, turn the porch lights on every day at 8 pm.
But Remarkable Alexa could learn from users so that it
powers on the television for a favorite weekly program or turns on a user's
coffee pot after a morning alarm goes off, which is possible today through
prompts that Amazon calls Routines.
Some of the people noted that for such a service to work
properly it will require customers to buy additional Alexa-enabled devices.
The company had been working on devices last year to get the
service into more rooms of the house, such as Alexa-enabled home energy
consumption trackers and a carbon monoxide detector, people familiar with the
matter previously told Reuters.
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