Amazon (NASDAQ:AMZN) has enhanced its cloud-based voice assistant, Alexa, by incorporating generative artificial intelligence (AI) technology to make interactions more human-like. At the company’s 2023 product event held yesterday, Dave Limp, the head of devices, disclosed that AMZN’s Echo devices would now be driven by generative AI and built upon a new, customized large language model.
With this upgrade, the virtual assistant will have the capability to adjust its tone and responses to express emotions such as agreement, enthusiasm, laughter, and astonishment. It can also adapt to a user’s natural pauses and hesitations, making conversations with Alexa seem more natural and engaging. Also, Alexa’s response time is expected to increase by up to 40%.
Amazon has announced that customers in the United States will soon have access to these new capabilities through a free preview on their existing Echo devices.
Limp, who is stepping down from his role later in 2023, also introduced the new Echo Show 8, featuring edge-to-edge glass, updated cameras, and microphones. Interestingly, AMZN also rolled out several other new products at the event.
Amazon’s decision to enhance its devices with generative AI aligns with similar efforts by its competitors like Alphabet (GOOGL) and Microsoft (MSFT). Both tech giants are aggressively advancing their capabilities in the AI field.
Recent Legal Development
The Federal Trade Commission (FTC) has recently identified three executives it alleges were involved in a scheme to enroll customers in Amazon’s Prime program without their knowledge and make it difficult for them to cancel their subscriptions.
The named executives are Neil Lindsay, who oversaw Prime as a senior vice president, Russell Grandinetti, the senior vice president responsible for international consumers, and Jamil Ghani, the vice president in charge of the Prime subscription program.
The FTC believes that these executives were aware of the misconduct but did not take corrective action.
Is AMZN a Buy Right Now?
Based on Amazon’s strong presence in the technology sector and efforts to keep up with the changing trends, analysts continue to remain highly optimistic about AMZN stock.
Amazon has a Strong Buy consensus rating on TipRanks based on 39 Buys and one Hold assigned in the past three months. In addition, the average price target of $175.63 per share implies 29.82% upside potential. Shares of the company have gained 57.6% so far in 2023.