Amazon’s paid Alexa is coming to fill a $25 billion hole dug by Echo devices

Amazon’s plan to launch a paid version of Alexa is part of a strategy change to reverse the over $25 billion in losses that its devices business incurred from 2017 to 2021, according to a report from The Wall Street Journal. The AI-supercharged Alexa, which is rumored to cost up to $10 / month, could arrive as soon as this month.

With a potential launch just weeks away, employees reportedly have doubts about whether the new version of Alexa will catch on. A person who worked on the Alexa team told the WSJ that the division is racing toward the deadline to launch the subscription even though “the technology isn’t there.” Amazon’s former head of devices, David Limp, first revealed Amazon’s plans to charge for an improved version of Alexa last year.

As previously reported by Reuters, the “more conversational” Alexa is supposed to come with generative AI features that could allow it to complete multiple tasks in one prompt and learn from users to create routines. But Amazon has reportedly fallen far behind on the project. Last month, a report from Fortune suggested that Alexa isn’t even close to “accomplishing Amazon’s mission of being ‘the world’s best personal assistant’” as the team grapples with technical and organizational issues.

Employees are also concerned about whether people will want to pay for a subscription on top of Amazon’s $139 / year Prime membership, the WSJ reports. With the base versions of AI assistants — like ChatGPT, Google Gemini, and soon, an improved version of Siri — not costing anything to use, Amazon might have a hard time charging for Alexa, especially when the existing version of the voice assistant will stay free.