Amazon to launch AI-overhauled Alexa with paid plans, CNBC reports

(Reuters) - Amazon.com (NASDAQ: AMZN) will introduce a more conversational artificial intelligence-powered version of its Alexa voice assistant later this year and plans to charge a monthly subscription fee to offset technology costs, CNBC reported on Wednesday.

While the e-commerce giant is yet to nail down the price of the new services, a subscription to Alexa will not be included in its popular $139 annual Prime offering, the report said, citing people with knowledge of the company's plans.

Amazon declined to comment on the report.

The company said in September it was working on a generative AI-powered version of Alexa, amid growing competition from chatbots made by OpenAI and Alphabet's Google.

It doubled down on the plan in its annual shareholder letter, published last month, saying it was building GenAI applications across its consumer businesses, including a more capable Alexa.

The company introduced Alexa in 2014 but has not found a consistent means to make it profitable, instead driving shoppers to the company's website for more purchases.

Meanwhile, OpenAI unveiled a new AI model called GPT-4o last week, which enables users to speak to ChatGPT and obtain real-time responses without lag. It can also interrupt ChatGPT.

Google also revealed upgraded versions of its Gemini chatbot as well as improvements to its search engine last week.

Apple, too, is planning an AI overhaul for its Siri virtual assistant - which is seen as another laggard in the AI race - according to media reports.

The CNBC report said Amazon would use its own Titan large language model for the Alexa upgrade.

The company has made hefty bets on AI, including a $4 billion investment in Anthropic, whose Claude chatbot competes with ChatGPT.

Still, investors worry that Microsoft's early lead in the AI race through its OpenAI investment could help it wrest a bulk of market share in the cloud industry from Amazon Web Services, the largest player in the space.

(Reporting by Zaheer Kachwala in Bengaluru; Editing by Pooja Desai)

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