Amazon CEO Plans to Introduce Ads in Alexa Conversations

Amazon CEO Andy Jassy has identified a potential opportunity to serve advertisements to users while they interact with the company's advanced digital assistant, Alexa+. He shared this vision during Amazon's second-quarter earnings call on Thursday.

“Customers are enthusiastic about the Alexa+-enabled devices they can purchase from us. Many people already use Alexa+ for shopping; it provides an enjoyable experience that we are continuously improving,” Jassy told investors and Wall Street analysts. “I believe that, over time, as users engage in more extended, multi-turn conversations, there will be opportunities to incorporate advertising. This can help with product discovery and serve as a revenue driver.”

Amazon has launched Alexa+ to millions of customers, aiming to enhance its legacy assistant with agentic capabilities and more natural conversational flow. Alexa+ represents Amazon's response to generative AI voice assistants from competitors like OpenAI, Google, and Perplexity, which have made older systems seem obsolete. Nevertheless, the business models for generative AI products are still evolving.

Amazon offers Alexa+ at no extra cost to Prime subscribers, who pay $14.99 per month, and has introduced a standalone $20 monthly subscription tier. On Thursday, Jassy indicated that Amazon might eventually introduce additional subscription options for Alexa+—potentially including an ad-free version.

To date, advertising on Alexa has been limited. On occasion, users might view a visual ad on an Echo Show smart display or hear a sponsored message between songs on an Alexa-enabled speaker.

However, Jassy’s vision of AI-generated ads delivered within multi-step conversations to help users discover new products is a novel frontier for Amazon and the broader tech sector. Marketers have shown interest in placing ads within AI chatbots, specifically Alexa+, though the implementation details are not yet defined.

Amazon's rivals in the AI domain also appear to view advertising as a promising revenue model for generative AI. Google is experimenting with integrating ads into its AI-powered search experience, AI mode, while OpenAI CEO Sam Altman has expressed openness to a "tasteful" advertising approach within ChatGPT.

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Amazon is making massive investments to compete in the AI arena. In Q2 2025, the company's capital expenditures surged to $31.4 billion, a 90% increase year-over-year. A significant portion of this spending is dedicated to developing proprietary AI chips and expanding data center infrastructure to support AI models. Although AWS revenue grew by 18% in the second quarter, Amazon likely needs new revenue streams to justify these substantial investments.

Jassy is counting on users engaging more extensively with Alexa+ than with the original Alexa, which could boost both advertising and e-commerce activity on Amazon.com. However, early feedback on Alexa+ has been mixed. Reports suggest that Amazon has faced challenges in developing some of its more complex features, and the rollout has progressed slower than anticipated.

Several issues must be resolved before Amazon introduces ads into Alexa+. Like other AI models, Alexa+ is susceptible to hallucinations. Before brands entrust Alexa+ as a promoter for their products, Amazon may need to implement safeguards to prevent the AI from making false or misleading claims.

Jassy appears highly motivated to expand advertising's role within Amazon's business. The company's ad revenue increased by 22% in the second quarter compared to the same period last year.

Incorporating ads into AI chatbot dialogues could also raise privacy considerations. Users typically share more information with generative AI assistants than with deterministic systems like traditional Alexa or Siri. As a result, these advanced chatbots gather more user data. Some individuals may feel uneasy about this data being used for targeted advertising or having commercial messages inserted into their natural conversations with an AI.