The Zhitong Finance App learned that, according to people familiar with the matter, Amazon (AMZN.US) is using artificial intelligence generation technology to upgrade its decade-old Alexa voice assistant, and plans to charge monthly subscription fees to offset technology costs.

According to two people familiar with the matter, Amazon will launch a more conversational version of Alexa later this year, or will better compete with the new generative artificial intelligence chatbots launched by companies such as Google and OpenAI. The Alexa service will not be included in the $139 per year Prime service, and Amazon has yet to determine the price, according to a source.

Amazon declined to comment on its plans regarding Alexa.

Ten years ago, the Alexa voice task launched by Amazon in 2014 amazed consumers, but today, with the rapid development of artificial intelligence, past features seem slightly outdated. Last week, OpenAI released GPT-4O, which is more in-depth than Alexa and has two-way conversation capabilities. For example, conversations can be translated into different languages in real time. In addition, Google (GOOGL.US) has also launched a similar generative artificial intelligence voice function for Gemini.

David Limp (DavidLimp), Amazon's former senior vice president of devices and services, told TheVerge in September last year that the company is considering charging for a more powerful version of Alexa.

Some people interpreted last week's statement as a threat to Alexa and Siri. New York University professor Scott Galloway (Scott Galloway) called the updates “Alexa and Siri killers” in his recent podcast. Currently, many people use Alexa and Siri to perform basic tasks such as setting timers or alarms and reporting the weather.

According to people familiar with the matter, the development of new artificial intelligence chatbots in recent months has increased internal pressure on the department. The department was once seen as the darling of Amazon founder Jeff Bezos (Jeff Bezos), but since he left, the department has been constrained by strict profit requirements.

Three former employees pointed out that Bezos was very obsessed with Alexa in the early days, describing it as a passion project of their own. Bezos' attention brought in more money, reducing the pressure to immediately reap returns from those funds.

According to three people familiar with the matter, things changed after Andy Jassy (Andy Jassy) took over as CEO in 2021. They said that during the pandemic, Jasi was responsible for rationalizing Amazon's business, and Alexa became less taken seriously internally. According to a source familiar with the matter, Jia Xi has privately always been unhappy with the capabilities of modern Alexa. For example, according to one person present, Jassie is an avid sports fan. She asked her voice assistant for the live score of a recent game, but Alexa didn't know the answers that were easy to find online, and Jaxi publicly expressed her frustration about this.

In an interview, Amazon stated that the company released its annual shareholder letter last month. In her letter, Jassie mentioned that the company is building “a large number of GenAI applications, covering all of Amazon's consumer businesses,” adding that these include “a smarter, more capable Alexa.”

The team's task now is to turn Alexa into a relevant device, gain a foothold in the new artificial intelligence competition, and justify the resources and numbers Amazon has invested in it. According to three sources, the team has undergone a large-scale restructuring, and most personnel have been transferred to the Artificial General Intelligence (AGI) team. Other sources pointed out that Alexa, a team of thousands of employees, is already bloated.

Amazon said that as of 2023, the company has sold more than 500 million Alexa-enabled devices, gaining a foothold among consumers.

Is it too early for Alexa to arrive?

Apple, Amazon, and Google have all introduced artificial intelligence voice assistants earlier, but the current cutting-edge GenAI wave can still be further empowered to achieve more creative interactions that are closer to human behavior. According to foreign media reports, Apple (AAPL.US) is expected to launch a more interactive Siri at the annual developer conference to be held in June this year.

People who have worked on the Alexa team think it's a great idea, but it's probably too early, and it might be difficult to reverse course.

Additionally, since OpenAI, Microsoft, and Google all recruit talents from the same academic and technical talent pools, finding AI engineering talent is also a challenge. Also, due to the need for hardware and computing power, generative artificial intelligence is expensive to perform work tasks. A source estimated the cost of using Alexa once was 2 cents per query, and said that an internal price of $20 had been proposed. Another source believes that this requires a single digit dollar. OpenAI's ChatGPT premium model costs $20 per month.

Despite this, they point to Alexa's user potential. Currently, there are hundreds of millions of homes with Alexa installed devices, and this user base is a huge opportunity. However, Alexa staff also said that the risk cannot be ignored. Alexa has already entered people's living rooms and kitchens, and the risk will be even greater. If Alexa can't understand instructions or provide unreliable information, it will cause more serious errors.

Amazon has been battling the perception that the company is lagging behind when it comes to artificial intelligence. Although it provides a variety of artificial intelligence models on Amazon AWS, there is currently no leading big language model to replace OpenAI, Google, or Meta (META.US). Amazon spent $2.75 billion to back artificial intelligence startup Anthropic, the largest venture capital in the company's 30-year history. Google has also invested in and partnered with Anthropic.

Amazon will use its own large-scale language model Titan in the Alexa upgrade, according to a source familiar with the matter.

According to two sources familiar with Bezos, Bezos is also one of those concerned about Amazon's backwardness in the field of artificial intelligence. According to foreign media reports last week, Bezos is still “very concerned” about Amazon's strength in artificial intelligence. He has been emailing Amazon executives hoping to learn why some AI startups choose other cloud providers over AWS.