Amazon Phases Out Developer Incentives, Embraces AI to Revitalize Alexa's Competitive Edge (Updated)

Author: Anusuya Lahiri | April 12, 2024 07:31am

Editor’s Note: The story has been updated with Amazon’s response in paragraph 5

Amazon.com Inc (NASDAQ:AMZN) will discontinue its Alexa Developer Rewards Program, which previously paid creators of popular Alexa applications monthly, by the end of June. 

This move marks a significant shift in Amazon’s strategy towards its voice-activated digital assistant platform. 

In addition, Amazon is phasing out a support program offering free Amazon Web Services credits to Alexa developers. 

However, developers will still have the opportunity to earn through in-app purchases, according to a Bloomberg report.

“These are older programs launched back in 2017 as a way to help newer developers interested in building skills accelerate their progress. Today, there are over 160,000 skills available for customers, a well-established Alexa developer community, and new LLM-powered tools that will help developers build new experiences for Alexa. These older programs have simply run their course, so we decided to sunset them,” Amazon spokesperson told Benzinga.

Despite the initial success and widespread adoption of Alexa-enabled devices, the platform needs help to maintain its relevance in the face of rapid advancements in generative artificial intelligence. 

Amazon has been attempting to integrate more generative AI features into Alexa to stay competitive.

However, the platform’s limitations, including the cumbersome process of browsing apps via voice command and smartphones’ superior functionality for many tasks, led to many Alexa Skills needing to progress beyond primary experimental stages. 

Previously, Amazon CEO Andy Jassy had flagged the transformative potential of generative artificial intelligence (AI) in enhancing customer experiences across Amazon’s enterprise and consumer businesses, including the Alexa model. 

Following a recovery period from a recent slump, the tech industry is embracing a philosophy of achieving more with fewer resources. 

Leading companies such as Amazon, Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) Google, Microsoft Corp (NASDAQ:MSFT), and Meta Platforms Inc (NASDAQ:META) are implementing smaller-scale layoffs, honing in on cost-efficiency and operational streamlining while their operations and share values experience a resurgence. 

Amazon has executed strategic reductions within its Alexa unit to double down on generative AI initiatives. 

In contrast, Meta has proceeded with modest personnel reductions amidst recording its highest quarterly revenue in a decade. 

Similarly, Google has pared down its workforce across several units, including Waymo, to reallocate efforts towards key projects like AI development. 

Amazon stock gained over 86% in the last 12 months. Investors can gain exposure to the stock via SPDR Select Sector Fund – Consumer Discretionary (NYSE:XLY) and Vanguard Consumer Discretion ETF (NYSE:VCR).

Price Action: AMZN shares closed higher by 0.15% at $185.95 on Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo via Shutterstock

Posted In: AMZN GOOG GOOGL META MSFT VCR XLY