After Prime Video, this Amazon service to get ads, confirms CEO Andy Jassy
CEO Andy Jassy confirmed during the company's second-quarter earnings call that advertisements will be integrated into Alexa+ conversations, marking the next phase of Amazon's ad expansion strategy after introducing ads to Prime Video. The generative AI-powered voice assistant could see ads delivered during multi-turn conversations as "a lever to drive revenue," Jassy told investors Thursday.
Currently, Alexa+ costs $19.99 monthly for non-Prime members while remaining free for Prime subscribers who pay $14.99 monthly. Jassy hinted at potential subscription tiers beyond current offerings, suggesting an ad-free premium option similar to Prime Video's structure.
Amazon's AI assistant struggles with profitability despite millions of users
The move addresses Amazon's Devices & Services division's financial challenges, which reportedly lost $25 billion between 2017 and 2021 despite having 500 million Alexa-enabled devices. Amazon has invested heavily in AI development, with capital expenditures rising 90% to $31.4 billion in Q2 2025, primarily for AI chips and data centers.
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Traditional Alexa already features limited advertising through visual ads on Echo Show displays and occasional audio promotions between songs. However, Jassy's vision involves
AI-generated ads
seamlessly integrated into natural conversations, representing uncharted territory for voice assistants.
Tech giants embrace AI advertising as new revenue stream
Amazon joins other tech companies exploring AI-powered advertising.
has begun testing ads within AI search responses, while OpenAI CEO Sam Altman expressed openness to "tasteful" advertising in ChatGPT. Microsoft is actively courting advertisers for its Copilot platform.
The advertising integration raises privacy concerns, as users typically share more personal information during conversational AI interactions compared to traditional assistants. Early Alexa+ reviews have been mixed, with Amazon reportedly struggling to deliver promised features despite the gradual rollout to millions of customers.
Amazon's advertising revenue grew 22% year-over-year in Q2, highlighting the business model's importance as the company seeks to monetize its substantial AI investments.
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