Amazon plans to give Alexa an AI overhaul — and a monthly subscription price
Amazon is upgrading its decade-old Alexa voice assistant with generative artificial intelligence and plans to charge a monthly subscription fee to offset the cost of the technology, according to people with knowledge of Amazon’s plans.
The Seattle-based tech and retail giant will launch a more conversational version of Alexa later this year, potentially positioning it to better compete with new generative AI-powered chatbots from companies including Google and OpenAI, according to two sources familiar with the matter, who asked not to be named because the discussions were private. Amazon’s subscription for Alexa will not be included in the $139-per-year Prime offering, and Amazon has not yet nailed down the price point, one source said.
Amazon declined to comment on its plans for Alexa.
While Amazon wowed consumers with Alexa’s voice-driven tasks in 2014, its capabilities could seem old-fashioned amid recent leaps in artificial intelligence. Last week, OpenAI announced GPT-4o, with the capability for two-way conversations that can go significantly deeper than Alexa. For example, it can translate conversations into different languages in real time. Google launched a similar generative-AI-powered voice feature for Gemini.
Some interpreted last week’s announcements as a threat to Alexa and Siri, Apple‘s voice assistant feature for iPhones. NYU professor Scott Galloway called the updates the “Alexa and Siri killers” on his recent podcast. Many people use Alexa and Siri for basic tasks, such as setting timers or alarms and announcing the weather.
The development of new AI chatbots in recent months has increased the pressure internally on a division that was once seen as a darling of Amazon founder Jeff Bezos, according to the sources — but has been subject to strict profit imperatives since his departure.
Three former employees pointed to Bezos’ early obsession with Alexa, describing it as his passion project. Attention from Bezos resulted in more dollars and less pressure to make a return on those funds immediately.
That changed when Andy Jassy took over as CEO in 2021, according to three sources. Jassy was charged with rightsizing Amazon’s business during the pandemic, and Alexa became less of a priority internally, they said. Jassy has been privately underwhelmed with what modern-day Alexa is capable of, according to one person. The Alexa team worried they had invented an expensive alarm clock, weather machine and way to play Spotify music, one source said.
For instance, Jassy, an avid sports fan, asked the voice assistant the live score of a recent game, according to a person in the room, and was openly frustrated that Alexa didn’t know an answer that was so easy to find online.
When reached for comment, Amazon pointed to the company’s annual shareholder letter released last month. In it, Jassy mentioned that the company was building a “substantial number of GenAI applications across every Amazon consumer business,” adding that that included “an even more intelligent and capable Alexa.”
The team is now tasked with turning Alexa into a relevant device that holds up amid the new AI competition, and one that justifies the resources and headcount Amazon has dedicated to it. It has undergone a massive reorganization, with much of the team shifting to the artificial general intelligence, or AGI, team, according to three sources. Others pointed to bloat within Alexa, a team of thousands of employees.
As of 2023, Amazon said it had sold more than 500 million Alexa-enabled devices, giving the company a foothold with consumers.
Alexa, were you too early?
Apple, Amazon and Google were early movers with their voice assistants, which did employ AI. But the current wave of advanced generative AI enables much more creative, human-sounding interactions. Apple is expected to unveil a more conversational Siri at its annual developers conference in June, according to The New York Times.
Those who worked on the Alexa team describe it as a great idea that may have been too early, and that it’s going to be hard to turn the ship around.
There’s also the challenge of finding AI engineering talent, as OpenAI, Microsoft and Google recruit from the same pool of academics and tech talent. Plus, generative AI workloads are expensive thanks to the hardware and computing power required. One source estimated the cost of using generative AI in Alexa at 2 cents per query, and said a $20 price point was floated internally. Another suggested it would need to be in a single-digit dollar amount, which would undercut other subscription offerings. OpenAI’s ChatGPT charges $20 per month for its advanced models.
Still, they point to Alexa’s installed user base, with devices in hundreds of millions of homes, as an opportunity. Those who worked on Alexa say the fact that it’s already in people’s living rooms and kitchens makes the stakes higher, and mistakes more costly if Alexa doesn’t understand a command or provides unreliable information.
Amazon has been battling a perception that it’s behind in artificial intelligence. While it offers multiple AI models on Amazon Web Services, it does not have a leading large language model to unseat OpenAI, Google or Meta. Amazon spent $2.75 billion backing AI startup Anthropic, its largest venture investment in the company’s three-decade history. Google also has an Anthropic investment and partnership.
Amazon will use its own large language model, Titan, in the Alexa upgrade, according to a source.
Bezos is among those who have voiced concern that Amazon is behind in AI, according to two sources familiar with him. Bezos is still “very involved” in Amazon’s AI efforts, CNBC reported last week, and has been sending Amazon executives emails wondering why certain AI startups are picking other cloud providers over AWS.
Navan, the business travel, payments, and expense management startup, filed on Friday afternoon to go public.
Its S-1 filing with the Securities and Exchange Commission indicates that the company plans to list on the Nasdaq Global Select Market under the symbol “NAVN.”
Navan reported trailing 12-month revenue of $613 million (up 32%) across over 10,000 customers, and gross bookings of $7.6 billion (up 34%), according to the S-1 filing.
Goldman Sachs and Citigroup will act as lead book-running managers for the proposed offering.
Navan ranked No. 39 on this year’s CNBC Disruptor 50 list, and also made the 2024 list.
The IPO market has bounced back this year, with deal activity up 56% across 156 deals (roughly 200 IPO filings in all) and $30 billion in proceeds, up over 23% year over year, according to IPO tracker Renaissance Capital. It has been the best year for IPOs since 2021, though still far below the Covid offering boom years, when over $142 billion (2021) and $78 billion (2020) was raised by IPOs.
This year’s deal flow has been highlighted by hot AI names like Coreweave, as well as some of the startup world’s most highly valued firms from the past decade, such as fintech Klarna and design firm Figma, crypto companies Circle, Bullish and Gemini, and some long-awaited IPO candidates finally hitting the market, such as Stubhub this week, though its shares have slumped since the first day of trading. Top Amazon reseller Pattern went public on Friday.
Other startups are expected to pursue deals given the increased investor appetite.
The Renaissance IPO ETF is up 20% this year.
Launched by CEO Ariel Cohen and co-founder Ilan Twig in 2015, Navan set out to disrupt a business travel sector where incumbents relied on clunky legacy tools and fragmented workflows.
The Palo Alto-based company, formerly called TripActions, refers to itself as an “all-in-one super app” for corporate travel and expenses.
Customers include Unilever, Adobe, Christie’s, Blue Origin and Geico.
It has also been pushing further into AI, with a virtual assistant named Ava handling approximately 50% of user interactions during the six months ended July 31, according to the filing, and a proprietary AI framework called Navan Cognition supporting its platform, as well as proprietary cloud infrastructure.
“We built Navan for the road warriors, for CEOs and CFOs who understand travel’s critical importance to their strategy, the finance teams who demand precision and control, the executive assistants juggling itineraries, and the program admins ensuring seamless events,” the co-founders wrote in an IPO filing letter.
“We saw firsthand the frustration of clunky, outdated systems. Travelers were forced to cobble together solutions, wait for hours on hold to book or change travel, and negotiate with travel agents. They struggled to adhere to company policies, with little visibility into those policies, and after all that, they spent even more time on tedious expense reports after a trip. We felt the pain of finance teams struggling to gain visibility into fragmented travel spending and to enforce policies, and the frustration of suppliers unable to connect directly with the high-value business travelers they sought to serve,” they wrote in the filing.
Revenue grew 33% year-over-year from $402 million in fiscal 2024 to $537 million in fiscal 2025, according to the S-1 filing. The company reported a net loss that decreased 45% year-over-year from $332 million in fiscal 2024 to $181 million in fiscal 2025. Gross margin improved from 60% in fiscal 2024 to 68% in fiscal 2025.
The business travel and expense space is crowded, with fellow Disruptors Ramp and Brex, and TravelPerk, as well as incumbents like SAP Concur and American Express Global Business Travel.
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A gamer plays soccer title Pro Evolution Soccer 2019 on an Xbox console.
Sezgin Pancar | Anadolu Agency via Getty Images
Microsoft said on Friday that it will increase the recommended retail price of several Xbox consoles in the U.S. starting in October because of “changes in the macroeconomic environment.”
The company said it would not increase prices for accessories such as controllers and headsets, and that prices in other countries would stay the same.
While Microsoft didn’t explicitly attribute the increase to the Trump administration’s tariffs, many consumer companies have been warning for months that higher prices are on the way. President Donald Trump has issued tariffs this year on multiple countries with a stated goal to bring more manufacturing to the U.S.
“We understand that these changes are challenging, and they were made with careful consideration,” Microsoft said on its website.
It’s the second time Microsoft has raised prices on its consoles in the U.S. this year. Rivals Sony and Nintendo have also raised console prices in the U.S. as Trump’s tariffs went into effect.
Here are the changes, according to a PDF posted on Microsoft’s website:
- Xbox Series S will start at $399, up from $379 previously. A version with 1TB of storage costs $449.
- Xbox Series X Digital console now costs $599, a $50 increase. The Xbox Series X with a disc drive also got a $50 increase to $649.
- The most expensive version, with 2TB of storage, costs $799, up from $729.
WATCH: Fed governor doesn’t see material inflation from tariffs
Ticket reseller StubHub signage on display at the New York Stock Exchange for the company’s IPO on Sept. 17, 2025.
NYSE
After a long wait to get public, StubHub has had a rough start to life on the New York Stock Exchange.
Shares of the online ticket vendor dropped 10% on Friday, falling for a third straight day since debuting on Wednesday. At $18.46, the stock is now down 21% from its IPO price of $23.50.
StubHub, trading under ticker symbol “STUB,” has lagged behind fellow market newcomers like online lender Klarna, design software company Figma and stablecoin issuer Circle, which delivered early returns for investors following their recent IPOs. Shares of cybersecurity firm Netskope also rose 10% on Friday in their second trading day, after an initial pop on Thursday.
StubHub had been trying to go public for the past several years, but delayed its debut twice. The most recent stall came in April after President Donald Trump’s announcement of sweeping tariffs roiled markets. The company filed an updated prospectus in August, effectively restarting the process to go public, and has since seen its market cap slip to about $6.8 billion from $8.6 billion at its IPO.
Founded in 2000, StubHub primarily generates revenue from connecting buyers with ticket resellers. In the first quarter, revenue rose 10% from a year earlier to $397.6 million. The company’s net loss widened to $35.9 million from $29.7 million a year ago.
StubHub CEO Eric Baker told CNBC on Wednesday that the company expects recently introduced federal regulations around transparent ticket pricing to cause a “one-time” hit to its financial results.
Regulators are zeroing in on online ticket sellers over their pricing mechanisms and whether the companies are doing enough to keep automated purchasing bots in check. The Federal Trade Commission on Thursday sued StubHub rival Live Nation Entertainment, the parent company of Ticketmaster, accusing it of illegal resale tactics.
While StubHub has failed to excite Wall Street, its struggles haven’t seeped into other deals as the tech IPO market continues to show signs of a resurgence after an extended dry spell. Amazon reseller Pattern Group saw its stock rise 12% on Friday, though shares initially slipped 6%.
WATCH: StubHub CEO on company’s IPO
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