You might soon see ads during your conversations with Alexa+
What's the story
Amazon's CEO Andy Jassy has revealed plans to integrate advertising into conversations with the company's AI-powered digital assistant, Alexa+. He made the announcement during the firm's Q2 earnings call. "I think over time, there will be opportunities, as people are engaging in more multi-turn conversations, to have advertising play a role," said Jassy.
User engagement
Potential for advertising to enhance product discovery
Jassy emphasized the positive response from customers toward devices with Alexa+ integration. He said, "People do a lot of shopping [with Alexa+], it's a delightful shopping experience that will keep getting better." The CEO also hinted at the potential for advertising to help users discover new products and generate revenue for Amazon in the future.
Business model
Subscription tiers and rising capital expenditures
Amazon has invested heavily in Alexa+, making it free for Prime customers or available as a standalone subscription. Jassy hinted at the possibility of introducing more subscription tiers in the future, including an ad-free option. This comes amid a surge in Amazon's capital expenditures, which jumped 90% year-on-year to $31.4 billion in Q2 2025, largely driven by investments in AI chips and data centers.
Industry shift
Advertising in AI chatbots gaining momentum
The idea of integrating advertising into AI chatbots is gaining traction, with Google also exploring this for its AI-powered search experience. OpenAI CEO Sam Altman has expressed openness to "tasteful" advertising in ChatGPT. Despite mixed reviews and a slower-than-expected rollout of Alexa+, Jassy remains optimistic about user engagement driving more advertising and shopping on Amazon.com.
Worries
Privacy concerns and user discomfort with ads
Amazon's advertising revenue grew 22% YoY in Q2, indicating the company's growing focus on this business model. However, integrating ads into Alexa+ conversations could raise privacy concerns as generative AI chatbots collect more user data. Some users may be uncomfortable with their information being sold to advertisers or having ads appear in their natural language conversations with AI.