Amazon Bets on Alexa+ Ads: A New Frontier in AI Conversation?

Amazon CEO Andy Jassy revealed plans to incorporate ads into conversations with Alexa+, its AI-powered digital assistant, during the company's second-quarter earnings call. This move aims to boost product discovery and revenue. Alexa+ is Amazon's response to generative AI assistants from OpenAI, Google, and others, but its business model remains unclear. While Alexa+ has reached millions of users, its rollout has been slower than anticipated. Amazon's substantial AI R&D investment (90% capital expenditure increase in Q2), coupled with 22% ad revenue growth, necessitates exploring new revenue streams. However, challenges remain, including AI hallucinations and user privacy concerns.