Amazon announced it will host a product event on Feb. 26 in New York City, where the company is expected to unveil a long-awaited upgrade to its Alexa digital assistant. The event will feature news from the Alexa team, with Panos Panay, Amazon’s senior VP of devices and services, in attendance.
Alexa’s AI Overhaul in Response to Rising Competition
Amazon has been working on a revamped Alexa with advanced AI capabilities to compete with the growing influence of ChatGPT (OpenAI), Google Gemini, Microsoft Copilot, and Claude from Anthropic, a startup backed by Amazon.
According to Reuters, Amazon executives have scheduled a “Go/No-Go” decision meeting for Feb. 14 to finalize plans for launching the new Alexa.
What to Expect from the New Alexa
Amazon previewed a redesigned Alexa in 2023, showcasing a new feature called “Let’s Chat”, which enabled live conversations with the voice assistant. However, the company has shared few details since then and skipped its traditional fall 2024 product event.
Reports indicate that Amazon may introduce a monthly subscription fee for AI-enhanced Alexa, as the company looks to offset development costs.
Amazon’s Struggles to Monetize Alexa
Despite being present in hundreds of millions of homes, Alexa has not become the profitable business Amazon initially envisioned. The company has historically sold Alexa-enabled devices at low prices to drive customer engagement with its ecosystem, but this strategy has not yielded the expected financial returns.
Amazon has lost tens of billions of dollars on its devices business, according to The Wall Street Journal. Since late 2022, CEO Andy Jassy has been aggressively cutting costs, including multiple rounds of layoffs within the Alexa division.
Conclusion
Amazon’s Feb. 26 event will be a pivotal moment for Alexa’s future. With AI competition heating up, the company is betting on a more advanced, potentially subscription-based Alexa to reinvigorate its voice assistant business. Investors and consumers alike will be watching closely to see if this next iteration can finally make Alexa a financial success.
