Key insights
- Amazon is launching a subscription-based, AI-enhanced Alexa+ in the UK with a distinctly British personality. This move aims to monetize the service after years of losses. While primarily a UK-focused launch, successful monetization of AI services could positively influence Amazon's overall revenue and investor sentiment, indirectly benefiting US equities.
A decade after Amazon’s Echo smart speaker first launched in the UK, its Alexa bot is getting a new brain – and a new, chummy personality.
The online retailer’s chatbot has become a familiar sight in British households. About half of homes have at least one Alexa-enabled gadget.
But since the emergence of ChatGPT and a new wave of superintelligent AI bots, Alexa has been looking increasingly slow, stupid and out of date.
It is something Amazon has been racing to address – working to rewire Alexa’s brain and imbue its chatbot with a refreshed identity.
On Wednesday, it unveiled the fruits of its labour. More than three years since the launch of OpenAI’s ChatGPT, Amazon confirmed that it would be bringing its improved Alexa+ in the UK for the first time.
Unlike its original Alexa chatbot, this version will be subscriber-only. This will allow it to rake in fees for the product after years where it has lost billions of dollars on the service, which was a pet project of founder Jeff Bezos, inspired by his childhood love of Star Trek and science fiction.
Perhaps more surprising, though, is Alexa’s brand new personality. Rather than offering stilted, robotic answers, the new AI language model is designed to respond in a conversational, personable manner.
When used with Amazon’s Echo speakers, this chummier bot will be able to manage a user’s calendar or send emails on their behalf. It will even be able to remember certain things about its users, such as their preferred food orders or morning routines.
Amazon held a demonstration of the UK version of Alexa+, which it has infused with a distinctly British persona.
At times, it veered towards the hackneyed, telling Amazon executive Daniel Rausch that it would have a “gander at what you’ve got there”.
“Fantastic news, mate!” the chatbot exclaimed during another demonstration, when talking about the latest football results.
Alexa+’s responses may have come across as overly “matey”, but according to Rausch, its more conversational tone and intelligent answers have received a warm response in the US, where it soft-launched last year.
“Customers with Alexa+ use Alexa between two and three times more,” he told The Telegraph. “The engagement just goes up in every dimension.”
Rausch says customers are now experimenting with more complicated Alexa tasks.
For years, Amazon has tried to entice Echo fans to use Alexa for making purchases on Amazon.com or through other apps, helping to redirect revenues back to its core shopping business. But for the most part, people have defaulted to using the speakers for simple tasks such as playing music or asking about the weather.
Now “they’re trying new things”, Rausch says. “Things that are complicated are the things that are up the most.” Smart home interactions are up 50pc on the new Alexa+ bot compared to the original iteration.
Shopping via the chatbot has also become more popular, and is up fivefold, he says. Features such as booking taxi apps are coming soon.
Getting Alexa+ right will be crucial for breathing new life into Amazon’s devices business.
While an estimated 500 million Alexa devices have been sold, the product team reportedly lost the company $25bn (£19bn) between 2017 and 2021, according to a Wall Street Journal report. In 2022, reports suggested losses hit $10bn.
The free Alexa service did not translate into a wave of e-commerce sales powered by voice assistants. According to one Bloomberg report in 2021, as many as a quarter of Echo owners stopped using Alexa after just two weeks.
In 2023, Satya Nadella, the Microsoft chief, branded smart assistants such as Alexa as “dumb as a rock” compared to emerging AI chatbots.
Speaker sales have also flatlined. Mohammed Junaid, an analyst at Counterpoint Research, says global smart speaker shipments fell by 20pc in 2025 amid market “saturation” and “inconsistent product launches”.
Despite the reported losses, Rausch, who has led the division since 2023, insists the Alexa and Echo business is “super healthy”. Its cheap gadgets are marketed to be “as approachable as possible on price”, he claims. The standard Echo Dot speaker is priced at about £55.
Amazon will now be asking users to pay as much as £19.99 per month for an Alexa+ subscription. It will also be bundled as a perk of Amazon Prime, priced at £8.99 per month. This is how Amazon expects most customers to use it.
The release of the upgraded chatbot comes at a time of fierce competition among AI tools, with ChatGPT and Claude having shown bots can be used for complex tasks such as coding or online shopping. OpenAI is also reportedly working on its own smart home products.
Rausch says it took time for Amazon to be ready to launch Alexa+ as it needed to ensure that hundreds of millions of legacy gadgets and thousands of services would work as expected with the new AI. “People invested in these products,” he says. “They have them in their home. We need to support them.”
So far, though, reviews from early-access customers in the US have been mixed. Some Echo users have pined for the earlier, simpler version of Alexa.
After testing the new AI, tech publication Wired ran the headline: “Why is Alexa+ so bad?” In one complaint on Amazon’s tech forum, a user warns: “Avoid upgrading at all costs.”
“I swear Alexa is dumber since Alexa+,” another commenter adds.
While the original Alexa may have been limited to scripted answers, the new AI underpinning Alexa+ offers “probabilistic” responses. These may flow more like a conversation, but can lead to some unexpected, or even flatly wrong, results.
And despite being tuned to British speech, during Wednesday’s event Alexa made a few slip-ups that would jar with UK users – referring to a football score as “two to zero”, rather than “two-nil”.
The chatbot’s enthusiastic responses to questions may also be off-putting to users familiar with the older version of Alexa.
“We expect this could be polarising,” says Jessica Miller, head of data insights at FDM / CCS Insight. Some users will enjoy the “more relaxed, familiar interactions, while others may find it disconcerting”, she says.
Rausch says Amazon already has a solution. Customers will be able to edit the personality of Alexa+ if they find it too overbearing. However, he says most customers “at this point are starting to understand this era of generative AI”.
“UK customers love Alexa and they’re the most engaged customers on the planet. We expect the same with Alexa+.”