Amazon CEO eyes ads in Alexa+ conversations to boost revenue

New Delhi: Amazon CEO Andy Jassy announced plans to integrate advertisements into the company’s AI-powered voice assistant, Alexa+, during the company’s second-quarter earnings call on Thursday. 

The move aims to capitalise on the growing popularity of Alexa+ by weaving AI-generated ads into multi-turn conversations, a strategy Jassy believes will enhance product discovery and drive revenue for the tech giant.

“People are excited about the devices that they can buy from us that have Alexa+ enabled in it. People do a lot of shopping [with Alexa+]; it’s a delightful shopping experience that will keep getting better,” Jassy told investors and analysts. “I think over time, there will be opportunities, as people are engaging in more multi-turn conversations, to have advertising play a role to help people find discovery, and also as a lever to drive revenue.”

Amazon has rolled out Alexa+ to millions of customers, upgrading its legacy voice assistant with generative AI capabilities to enable more natural and task-oriented interactions. 

Jassy hinted at potential future subscription tiers, including ad-free options, which could lower costs for users willing to forgo ads.

The concept of embedding ads in AI-driven conversations is uncharted territory for Amazon and the broader tech industry. Unlike traditional Alexa, which occasionally delivers pre-recorded audio ads or banner ads on Echo Show displays, Alexa+ could dynamically generate ads tailored to ongoing dialogues. This approach, however, raises concerns about privacy and accuracy. Generative AI assistants like Alexa+ collect detailed conversational data, potentially creating rich user profiles for ad targeting, which could spark regulatory scrutiny and user unease. Additionally, like other AI models, Alexa+ is prone to “hallucinations”, generating inaccurate or misleading responses, which could undermine advertiser trust if not addressed.

Jassy’s announcement comes as Amazon’s advertising business shows strong momentum, with a 22% year-over-year revenue increase in Q2 2025. The company’s broader AI ambitions are also driving significant investment, with capital expenditures soaring 90% to $31.4 billion in the same period, largely to develop in-house AI chips and expand data centers. Integrating ads into Alexa+ could help offset these costs, especially as growth in Amazon Web Services (AWS) moderates.

Competitors like Google and OpenAI are also exploring advertising in AI interfaces, with Google testing ads in its AI-powered search and OpenAI’s Sam Altman expressing openness to “tasteful” ads in ChatGPT.