After several delays, Amazon has finally unveiled its Alexa digital assistant with a major generative AI upgrade which can be a major revenue driver for retailers as some of its “agentic” capabilities include independently surfing the web on your behalf and even making purchase decisions.
Amazon is calling the new service “Alexa+” and it is offering it free for its Prime members, but charging a $19.99 (A$31.69) fee per month for non-Prime members. The latest offering allows Amazon to make a stronger case for itself in the A$2.17 trillion smart home market.
Amazon first launched Alexa back in 2014, taking inspiration from the fictional Star Trek computer which was a seemingly AI-powered machine that people could control using their voice.
The decision to offer a generative AI model for Alexa comes as the company has been losing billions – A$37.99 billion by some estimates between 2017 and 2021 alone – selling its devices such as the Amazon Echo.
Via the subscription costs of a Prime membership or a standalone Alexa+ subscription, Amazon could begin recuperating some of those losses.
The company has already sold more than 600 million Alexa devices, which means that it has a captive audience of several hundred million customers who could subscribe to its new AI-version of Alexa.
Alexa+ is designed to be much more conversational, rather than just transactional. Built using large language models, the service “understands what you mean, and responds like a trusted assistant” whether you’re speaking in half-formed thoughts or using colloquial expressions, explains Panos Panay, SVP of Devices & Services at Amazon.
Last year, Amazon released six new foundational models for generative AI. Three of those models were reported to be “at least 75 per cent less expensive than the best-performing models in their respective intelligence class”.
Alexa+ will tap into these models as well as others available on Amazon Bedrock – a platform, which includes models from companies including Meta, Anthropic, Mistral AI and DeepSeek.
Amazon says that in the process of the development of Alexa+, it created a concept called “experts”— groups of systems, capabilities, APIs, and instructions that are aimed at accomplishing specific types of tasks for customers.
With these experts, Alexa+ can, for example, control your smart home with products from Philips Hue and Roborock; make reservations or appointments; explore discographies and play music from Spotify or Apple Music; order groceries from Amazon Fresh, or even a delivery from Uber Eats.
But one of the most sophisticated aspects of the new AI-powered technology is Amazon’s introduction of agentic capabilities into Alexa+.
As Panay explains, those agentic capabilities allow Alexa+ to “navigate the internet in a self-directed way to complete tasks on your behalf, behind the scenes.” For example, it you tell Alexa+ that you need to get your oven fixed, it searches the web, discovers a relevant service provider, authenticates it, arranges a repair, and comes back to tell you it’s done – without any intervention on your behalf.
Alexa+ can be also personalised, and keeps track of what music you listen to, what you ordered to eat, and remembers specific details such as whether your partner is a vegan or your child has certain food preferences when making a reservation at a Italian restaurant that you asked Alexa+ to take care of.
Amazon’s move towards its AI-powered Alexa model comes at a time when rivals such as OpenAI, DeepSeek, Gemini, and Musk’s xAI are all pushing forward with their own advanced generative AI models.
As Amazon CEO Andy Jassy pointed out, the company has a longstanding relationship with Nvidia, which will continue. “But our internal builders and our external customers want better price performance, which is why we have built our own custom AI silicon. As you get these generative AI applications to scale. They have to have the latency and have the right customer experience, and they have to have low cost,” Jassy said, according to The Australian.
Analysts believe that most of Amazon’s planned A$158.53 billion in capital expenditure this year will be spent on expanding its AI initiatives such as computing infrastructure, with about a quarter directed towards its ecommerce arm.
Initially, Alexa+ will begin rolling out in the US over the next few weeks, with Australia tipped to receive it later this year as the company expands its new service to more markets.
Amazon will initially prioritise Echo Show 8, 10, 15, and 21 device owners in the early access period, before rolling it out on other devices.
