According to recent statements made by Dave Limp, Amazon’s retiring Senior Vice President of Devices and Services, Amazon’s popular voice assistant Alexa may soon come with a monthly price tag.
Limp told Bloomberg that as Alexa improves with the help of generative AI capabilities, the company will have to spend more money on research and development and maintaining the service. Therefore, Amazon considers subscription pricing to be necessary.
Limp told Bloomberg, “when you start using these [generative AI] on a large scale, the cost to train the model, and the cost for inference of the model in the cloud, is substantial.” It would have to be truly outstanding before we would consider charging customers for it, which I do think we will. It must demonstrate the value you’ve come to anticipate from a’superhuman’ assistance.
Limp did point out, however, that the arrival of a premium Alexa is still a ways off. To make Alexa “superhuman” enough to justify a monthly subscription, a lot more effort is needed. For the time being, Alexa will continue to function in its current, free form.
We’ll have conversations with buyers to find out what they value most. “The Alexa you know and love today will continue to be provided at no cost,” Limp said.
Following his debut live display of Alexa’s new conversational AI skills on September 28 at Amazon’s Devices and Services event, Limp made these comments. Limp got off to a shaky start with Alexa, but eventually demonstrated its expanded capabilities by asking a series of questions designed to elicit answers that went beyond simple commands.
Limp, for instance, consulted Alexa for recommendations on films to watch based on his preference for action flicks starring Tom Cruise. Alexa replied with some movie suggestions, including Top Gun: Maverick, and explained why they might appeal to Limp.
The demo showed how far Alexa has come in terms of being intelligent, personalized, and conversant like a real being, despite a rough start. Limp stressed that consumers will be able to converse naturally with Alexa in the near future.
Amazon’s investments in generative artificial intelligence will enable future versions of Alexa to create their own material and outputs, rather than simply presenting what has already been stored in a database. Thanks to advances in generative AI, we now have tools that can build synthetic media such as photos, movies, and voices that sound remarkably like real people.
Amazon and the voice assistant industry are undergoing a sea change with the introduction of paid Alexa updates. Since its debut in 2014, Amazon has provided Alexa for free using proceeds from the company’s online sales. Siri and Google Assistant, two competing virtual assistants, are also available for no cost at the moment.
However, the costs associated with creating ever-more-powerful AI are quite high. If Alexa can give enough value and convenience to users, Limp thinks they will be prepared to pay for it. Analysts, however, are unsure if customers would accept the idea of paying for helpers they are accustomed to having for free.
What exactly a premium Alexa membership would offer is likewise unclear. It could be required solely for gaining access to Alexa’s more advanced features. Amazon might use Alexa exclusives to promote sales of Echo devices by limiting sophisticated functions to only Amazon devices.
Amazon is always looking for new ways to increase its income, and a possible subscription to Alexa would be the latest example. This month, Amazon introduced a free tier of Prime Video with commercials and a $2.99 monthly fee to remove ads. This is in addition to the $139 annual charge for Prime.
Also, Prime members who don’t spend $20 or more will no longer receive free same-day shipping; instead, Amazon will charge a small fee. Amazon’s retail operations are seeing increased costs, so the company is looking to new subscription services to help boost profits.
However, experts warn that if Amazon keeps raising prices, it could drive away customers. Customers have grown accustomed to the Prime ecosystem’s free benefits, such as Alexa and Prime Video. They may object to charges that detract from Prime’s appeal.
How much more consumers are ready to pay on top of Prime membership remains to be seen. Amazon, though, is staking future revenues on Alexa being worth a monthly membership as it increases its AI expenditures.