Would you pay for Alexa?

Author

Matt V
February 06, 2025

AMAZON

Amazon is set to launch its long-awaited generative AI-powered Alexa, marking its most significant upgrade in a decade.

A press event on February 26th in New York will unveil the new AI-superpowered Alexa, with Amazon betting big on enhanced conversational abilities to make Alexa a must-have rather than just your kitchen timer.

The update aims to enable Alexa to handle multiple prompts in a single session and even act independently on behalf of users.

But it’s a high-risk move: Amazon’s voice assistant business has yet to turn a profit, and the company is considering a subscription model priced between £4-£8 per month to make it financially viable. Yep - they want you to pay for Alexa.

What’s Changing?

  • The generative AI-powered Alexa will be able to remember user preferences and respond to multiple commands in sequence.

  • Amazon has invested £6.3 billion in AI startup Anthropic to help develop the technology.

  • A “Go/No-go” meeting on February 14 will determine if the AI Alexa is ready for release.

Will Users Pay Up?

Despite its initial promise, Alexa’s stagnation has left it underutilised. Amazon hopes the new AI-powered version will turn the tide, with analysts estimating a potential £475 million annual revenue if just 10% of users opt for a subscription.

But, the question remains - is there enough interest?

Bezos wanted Star Trek. So far, we’ve got “set a timer for five minutes.”