Since the debut of ChatGPT late last year, consumers and investors alike have been enthralled with the potential of artificial intelligence (AI) and more specifically, the advances in large-language models that power next-generation chatbots.
The public fascination with conversational AI lit a fire under big technology companies, which have been scrambling to develop and integrate similar products and capabilities into their own lineups. Not to be left behind, Amazon (AMZN 1.30%) joined the fray this week, debuting several AI-powered products, while also vowing to give the virtual assistant it pioneered a much-needed makeover.
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Expanding its lineup
Amazon announced the debut of four new Alexa-enabled Echo devices. The Echo Pop, at $39.99, features a front-facing directional speaker, "with a loveable semi-sphere form factor," the company says.
It also debuted the Echo Show 5. At $89.99, the latest version of its smart speaker has a compact touch screen for making video calls, checking doorbell cameras, or streaming movies from Amazon Prime. The Echo Show 5 for Kids ($99.99) includes parental controls and access to kid-friendly content.
Echo Buds, wireless earbuds for $49.99, feature "a semi-in-ear design that is built to deliver rich audio, long-lasting battery life, premium features, and hands-free access to Alexa," the company says.
Amazon also said Echo Auto -- a smart speaker designed for use in cars -- is coming to a variety of new countries, including France, Germany, Italy, and Spain, among others.
The headliner wasn't the expanding product line, however, but the revelation that sales of Alexa-enabled devices had surpassed 500 million. Use of Alexa increased 35 percent last year, said Rohit Prasad, senior vice president and head scientist for Alexa. He added that Amazon plans to add more generative AI-powered experiences for Alexa throughout the year.
In an interview with CNBC, Prasad revealed that the company is building a new and improved large-language model (LLM), dubbed Alexa Teacher, that will "make Alexa more conversational and intelligent." Alexa is currently powered by Amazon's existing LLM.
A squandered opportunity?
Amazon was one of the pioneers of AI-powered voice technology, introducing Alexa in 2014. The company quickly launched a host of Alexa-enabled devices, including Amazon-branded Echo smart speakers, Fire TV streaming sticks, thermostats, and home security systems.
Not willing to cede its advantage, Amazon also partnered with thousands of manufacturers, integrating Alexa into tens of thousands of consumer products, including clocks, televisions, and even vehicles -- allowing people to control these products using voice commands.
Amazon rarely shares information regarding the breadth of Alexa's reach. The last real update came in early 2019. At the time, Amazon said it had sold more than 100 million devices with Alexa on board. These included 150 different devices with Alexa built in -- more than 100 of which weren't made by Amazon.
There were also 28,000 smart-home products from 4,500 different manufacturers, with more than 70,000 Alexa "skills," (apps that accomplish specific tasks). These provided the company with a large and growing network of devices and a virtual treasure trove of user information to leverage.
However, with the recent rise of next-generation chatbots, Amazon appears to have been caught virtually unaware. The generative AI that powers the likes of ChatGPT and Alphabet's Bard, while still in its infancy (and admittedly flawed), is stealing the limelight -- while Alexa, one of the original AI-powered voice technologies, has become something of a wallflower.
Better late than never
Amazon has a different view. "Alexa has been and is at the forefront of AI for a long time," Prasad said. "We've been part of the cultural zeitgeist, and it hasn't slowed down." He pointed out that Alexa has an advantage: While users can only access ChatGPT and other chatbots via a web browser, Alexa is an "instantly available, personal AI" that people can communicate with by voice via thousands of Alexa-powered products.
Another advantage is the reams of data Amazon has regarding Alexa users. "This is where all the ambient context of who you are, what are you asking, where you are, comes in to make the best decision for you in that moment and on your behalf," Prasad said.
CEO Andy Jassy wrote in Amazon's most recent shareholder letter that the company is "investing heavily" in LLMs and generative AI.
It's still early days in the story of generative AI and these next-generation chatbots. Given Amazon's history of disruption, it's far too early to count the company out. In fact, I wouldn't be surprised if Amazon was making its own headlines in short order, putting Alexa back on top.
