Amazon set to unveil AI-powered Alexa revamp amid high stakes and delays: Report

Amazon is preparing to introduce its long-awaited Alexa generative AI voice assistant, marking the most significant update to the product since its launch in 2014. According to Reuters sources familiar with the matter, the company has scheduled an event on February 26 in New York, where Panos Panay, Amazon’s head of devices and services, will unveil the next-generation Alexa.

The revamped AI assistant is expected to enhance user interaction by processing multiple prompts in a single session and taking actions autonomously, unlike the current version, which handles only one request at a time. Amazon sees this as a major opportunity to convert its half a billion Alexa-enabled devices into a profitable business, potentially offering a subscription model in the range of $5 to $10 per month.

However, sources indicate that a final decision on the launch timeline will be made in a “Go/No-go” meeting on February 14, where executives will assess Alexa’s readiness.

The upcoming generative AI-powered Alexa represents a major shift for Amazon. Unlike its traditional voice assistant, which primarily handles simple tasks like setting timers and playing music, the new Alexa will be designed to engage in dynamic conversations and act as an “agent” on behalf of users.

This means Alexa could remember user preferences, suggest music or restaurants based on past choices, and even modify existing requests—such as changing a food delivery order before it is sent out.

The service will initially roll out for free to select users, but Amazon has not ruled out a future subscription model, with analysts at Bank of America estimating that a $5 monthly plan could generate $600 million annually if 10% of Alexa users subscribe.

The original vision for Alexa was spearheaded by Amazon founder Jeff Bezos, who wanted to create a voice assistant akin to the computers in “Star Trek”. The goal was for Alexa to handle everything from controlling smart home devices to writing emails and calling a taxi.

However, despite its promising start, Alexa has struggled to evolve beyond basic voice commands. While Amazon has continued to integrate Alexa into cars, TVs, thermostats, and mobile devices, lack of meaningful AI upgrades has made it less relevant in the face of ChatGPT, Google Gemini, and Apple’s upcoming AI-powered Siri.

Amazon first showcased an early version of the upgraded Alexa in September 2023, but delays due to concerns over response quality and speed prevented a public release. Internally, the AI project has been called “Banyan” and “Remarkable Alexa”, though it is unclear if these names will be used in the final launch.

Amazon’s AI-powered Alexa faces technical and competitive challenges. Generative AI models are known for hallucinations, where they fabricate incorrect or misleading information. Given Alexa’s widespread presence in cars, homes, and workplaces, ensuring accurate and reliable responses is critical.

Additionally, Amazon is partnering with AI startup Anthropic, in which it has invested $8 billion, to strengthen Alexa’s AI capabilities.

Meanwhile, competitors like Google, Apple, and OpenAI are aggressively expanding their AI-powered assistants. Google Gemini and Apple Intelligence are expected to introduce more natural AI interactions, while OpenAI’s ChatGPT has already become a preferred AI assistant for many users.

If Amazon proceeds with its planned February 26 announcement, the revamped Alexa will be compatible with existing Alexa-enabled devices. The company will continue to offer the “Classic Alexa” version for free, but sources say it has stopped adding new features to it.