Amazon CEO wants to put ads in your Alexa+ conversations
Amazon CEO Andy Jassy recently revealed the company’s strategic vision to integrate advertising directly into user conversations with its advanced AI-powered digital assistant, Alexa+. This significant announcement, made during Amazon’s second-quarter earnings call, signals a bold move to leverage multi-turn AI interactions for new revenue streams and enhanced product discovery.
Jassy emphasized the growing engagement users have with Alexa+-enabled devices, particularly for shopping. He stated, “People do a lot of shopping [with Alexa+]; it’s a delightful shopping experience that will keep getting better.” He further elaborated on the long-term potential, noting, “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.”
Alexa+ represents Amazon’s ambitious response to the new wave of generative AI voice assistants, such as those from OpenAI, Google, and Perplexity, which have redefined expectations for digital interactions. The company has already rolled out Alexa+ to millions of customers, aiming to evolve its legacy assistant into a more natural and agentic conversational AI. While the business models for these cutting-edge AI products are still evolving, Amazon is clearly exploring advertising as a key component.
Currently, Alexa’s advertising presence is limited to visual ads on devices like the Echo Show or pre-recorded audio ads between songs on smart speakers. However, Jassy’s vision of AI-generated ads delivered seamlessly within a multi-step conversation marks uncharted territory. This approach could revolutionize how users discover products and services, creating a highly personalized and contextually relevant advertising experience.
The tech industry’s leading players seem to echo Amazon’s sentiment. Google is actively exploring ways to infuse ads into its AI-powered search experience, ‘AI mode,’ while OpenAI CEO Sam Altman has expressed openness to a “tasteful” form of advertising within ChatGPT. This collective movement indicates a broader industry trend towards monetizing generative AI through integrated ad experiences.
Amazon’s push into conversational AI advertising comes amidst substantial investment in its AI capabilities. In the second quarter of 2025, Amazon’s capital expenditures soared to $31.4 billion, a 90% increase year-over-year, primarily driven by the development of in-house AI chips and the expansion of data centers to support complex AI models. Despite an 18% growth in its cloud business (AWS) revenue in Q2, these massive investments necessitate new avenues for revenue generation, making advertising a critical lever.
While Jassy is optimistic that increased user engagement with Alexa+ will translate into more advertising opportunities and heightened shopping activity on Amazon.com, the journey is not without its challenges. Early reviews of Alexa+ have been mixed, and Amazon has reportedly faced hurdles in deploying some of its more complex features, leading to a slower rollout than initially anticipated.
Moreover, the integration of ads into AI conversations raises important considerations, particularly regarding AI hallucinations. Before advertisers fully commit, Amazon must ensure its AI can reliably and accurately promote products without generating false or misleading information. Privacy is another significant concern. Generative AI chatbots inherently collect more user data due to their conversational nature, and some users may be apprehensive about this information being leveraged for targeted advertising within their private interactions.
Amazon’s advertising revenue itself saw a robust 22% increase in the second quarter compared to the previous year, underscoring the company’s growing reliance on this segment. As AI continues to evolve, the balance between innovation, monetization, and user trust will be crucial for Amazon and the entire tech industry.
