Prime Highlights: 

Amazon will unveil a generative-AI-powered Alexa on February 26, 2025. 

The revamped Alexa will enable multi-turn conversations and perform tasks on behalf of users, unlike the current version, which only handles single requests. 

The new Alexa will incorporate technology from Anthropic, an AI startup in which Amazon has invested $8 billion. 

Key Background: 

On February 26, Amazon will unveil a new iteration of Alexa, incorporating generative AI to revolutionize the voice assistant. This updated Alexa is set to enable multi-turn conversations and perform tasks on behalf of users—moving beyond the single-request functionality it currently offers. 

The evolution of Alexa has been slow in recent years, with limited advancements since its introduction in 2016. However, despite being embedded in more than half a billion devices, Alexa has failed to live up to its full potential, remaining underutilized and unprofitable. Amazon is set to change that with the upcoming launch. According to the company, the revamped Alexa will leverage AI technology from Anthropic, an AI startup in which Amazon has invested $8 billion. This partnership is expected to enhance Alexa’s capabilities, allowing it to tackle more complex tasks such as scheduling and shopping, and significantly improving its conversational abilities. 

A key moment for Amazon will be the “Go/No-Go” meeting on February 14, where executives will assess the AI-powered Alexa’s readiness for launch. Initially, the service will be available to a select group of users for free, though Amazon is considering introducing a subscription fee of $5 to $10 per month. The company will continue offering the classic Alexa but has stopped adding new features to that version. Financial analysts predict that, if successful, the generative-AI Alexa could be a major revenue driver. Bank of America estimates that a 10% subscription rate from active Alexa users could generate up to $600 million annually.