Amazon CEO Andy Jassy has revealed plans to introduce advertising directly into conversations with the company’s upgraded AI assistant, Alexa+, marking a significant shift in how tech companies might monetize generative AI products.
Speaking during Amazon’s second-quarter earnings call on Thursday, Jassy outlined his vision for integrating ads into multi-turn conversations between users and Alexa+. “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,” he told investors and analysts.
This approach represents uncharted territory for both Amazon and the broader tech industry. Unlike traditional digital advertising that appears on websites or apps, these would be AI-generated ads delivered naturally during ongoing conversations with the voice assistant.
Amazon Explores Conversational Ads for Alexa+ Amidst Soaring AI Investments
Amazon has already rolled out Alexa+ to millions of customers as part of its effort to compete with advanced AI assistants from OpenAI, Google, and Perplexity. The company offers Alexa+ free to Prime subscribers, who pay $14.99 monthly for the broader membership service, while standalone access costs $20 per month.
Jassy hinted that Amazon might introduce additional subscription tiers in the future, potentially including an ad-free option for users willing to pay more.
Currently, Alexa’s advertising presence is limited to occasional visual ads on Echo Show devices and pre-recorded audio spots between songs on smart speakers. The proposed conversational advertising would be far more integrated and personalized.
Amazon isn’t alone in exploring advertising as a business model for generative AI. Google is experimenting with ads in its AI-powered search experience, while OpenAI CEO Sam Altman has expressed openness to “tasteful” advertising in ChatGPT.
The interest makes financial sense given the enormous costs involved in AI development. Amazon’s capital expenditures jumped to $31.4 billion in the second quarter of 2025, up 90% from the previous year, largely due to investments in AI chips and data centers. While AWS cloud revenue grew 18%, the company needs new revenue streams to justify these massive investments.
Several hurdles remain before Amazon can successfully implement conversational advertising. AI hallucinations pose a significant risk – advertisers won’t want an AI assistant making false claims about their products during natural conversations.
Balancing Privacy, User Experience, and Revenue
Privacy concerns also loom large. These generative AI assistants, such as Alexa+, receive more intimate information than the usual voice assistants since customers engage in longer, more in-depth conversations with them. Some customers may be uneasy with the idea that this information would be utilized to sell to them.
Initial reaction to Alexa+ has been varied, with word that Amazon has had difficulty rolling out some of the assistant’s more advanced features. The rollout has taken longer than most industry analysts anticipated.
In spite of these difficulties, Jassy seems set on building the ad business at Amazon. Ad revenue at the company grew 22% in the second quarter from the same quarter last year, showing the potential for growth in the segment.
“People are excited about the devices that they can buy from us that has Alexa+ enabled in it,” Jassy said during the earnings call. “People do a lot of shopping [with Alexa+]; it’s a delightful shopping experience that will keep getting better.”
The CEO is wagering that users will have a more intense and more frequent interaction with Alexa+ compared to the original Alexa, with greater ad and direct-selling opportunities in Amazon’s e-store.
As artificial intelligence evolves, Amazon’s foray into chat-based advertising may set significant precedents for how companies address user experience versus revenue gain in the age of AI. Users will only accept ads integrated into their AI chat if they do.
