Former Amazon executive David Limp demonstrated a new generative AI-powered version of Alexa in September 2023, but the new Alexa was not ready for a prime time rollout. The Alexa large language model (LLM) that powers the new Alexa is far from state-of-the-art and lacks data and access to specialized computer chips. Amazon has deprioritized the new Alexa in favor of building generative AI for its cloud computing unit, AWS. The organizational structure and siloed business units within Amazon have hampered the development of the new Alexa. The new Alexa LLM has not met the go/no-go criteria for a widespread rollout due to concerns about safety and lack of data. Amazon's internal bureaucracy and infrastructure issues have slowed down the development of the new Alexa. Many former employees are skeptical that the new Alexa will ever be ready or that it will be able to compete with nimbler competitors like OpenAI. Despite challenges, Amazon remains committed to delivering a generative AI Alexa.
Former Senior Machine Learning Scientist at Alexa AI, Mihail Eric, details the challenges faced in integrating advanced AI into Amazon's Alexa. He criticizes the fragmented organizational structure, poor data access, and lack of collaboration. A Fortune report highlights further struggles, including Alexa's design limitations and the lack of a clear monetization strategy. The Alexa AI team also faces obstacles in accessing Anthropic's Claude AI model. These challenges hinder the transformation of Alexa into a more sophisticated and profitable AI assistant. [75ad874e] [1d57c36b]
Former senior machine learning scientist Mihail Eric shared his perspectives on why Amazon's Alexa fell behind in the AI competition. He cited mismanagement and mislabeling of data, difficulty accessing and utilizing internal data, fragmented organizational structure, misalignment between product goals and scientific research, and conflicts over success metrics as primary reasons for Alexa's lag. Eric highlighted the cumbersome process of rectifying mislabeled data and the lack of collaboration due to decentralized teams. He also mentioned the tension between customer-oriented results and experimental projects, leading to constant conflict and project abandonment. [19838cb4]
Amazon is planning a significant transformation of its Alexa voice assistant service, internally known as 'Banyan' and dubbed 'Remarkable Alexa.' The project aims to integrate advanced conversational generative AI capabilities across two subscription tiers. The updated version of Alexa, set to be released in August, promises to deliver a 'more intelligent and capable' experience. Amazon is considering introducing a subscription model with a fee of around $5 per month for access to the enhanced AI features. The move is aimed at competing more effectively with rivals like Google, Microsoft, and OpenAI. Amazon also plans to integrate Alexa more deeply into home automation and position it as a central hub for smart homes. The success of the subscription model will depend on convincing users of the value proposition in paying for features currently offered for free. Challenges such as software glitches and employee morale issues have reportedly plagued Amazon's AI development efforts. [4c0584b8] [2f8163b5] [a58c4389] [6de295bc]
Apple may try to monetize its Apple Intelligence (A.I.) at some point in the future as the company looks for new revenue streams. The long-term plan is to make money off the capabilities by charging for top-tier A.I. features, similar to how it charges for some iCloud features. Apple could potentially launch a paid service called 'Apple Intelligence+' with extra features that users pay monthly fees for. Additionally, Apple will receive a cut of the subscription revenue from every AI partner it brings onboard. This move would make Apple less reliant on hardware upgrades and more profitable from AI. Apple has been successful in increasing its services revenue, and its integration of AI has demonstrated real-world benefits. The company aims to open up a new revenue stream as its A.I. features continue to evolve and offer consumers an improved experience. [ce8cebff]
Bank of America has analyzed the potential financial impact of a paid tier for Amazon's Alexa devices. Assuming 10% of active users are willing to pay for an AI-supercharged Alexa, a $5/month tier could represent a $600 million incremental revenue opportunity. This would translate to 1.3 percentage points of growth to the 2025 subscription sales estimate at $49 billion. The Alexa fee initiative is seen as critical for Amazon's goal of turning the Alexa division into a profitable one. Amazon plans to stop paying developers to create apps for Alexa at the end of June. Bank of America has a Buy rating on Amazon with a price objective of $210. Shares of Amazon are up 0.13% in premarket trading and 24% year-to-date. [0f61d2f1] [6de295bc]
Apple is considering launching a paid service called 'Apple Intelligence+' to monetize its AI capabilities. The service would offer extra features that users would pay a monthly fee for, similar to how Apple charges for some iCloud features. Apple also plans to receive a portion of the subscription revenue from AI partners. This move would help Apple diversify its revenue streams and rely less on hardware upgrades. The company has seen success in increasing its services revenue and aims to continue this trend with its evolving AI features. [ce8cebff]
Apple is considering a subscription-based model for advanced features of its AI assistant, Apple Intelligence. The core functionalities of Apple Intelligence will remain free, but the potential premium tier, called 'Apple Intelligence+,' would offer additional features and services. The free version of Apple Intelligence is set to debut in fall 2024, bringing enhanced capabilities to Siri and potentially new features like photo organization and summarization. Apple Intelligence+ could offer more sophisticated AI tools, such as advanced language models and personalized coaching services. It would follow Apple's existing model for services like iCloud+, where users pay a monthly fee for additional storage and features. The motivation behind introducing a paid tier is to provide a new revenue stream and offset the costs of developing and maintaining advanced AI technologies. The success of Apple Intelligence+ would depend on its value proposition and differentiation from the free version. Apple has not officially announced Apple Intelligence+ or provided details about its features, pricing, and release date. [123d3c17]