It’s been just over a decade since Amazon first released its Amazon Echo smart speaker in 2014, powered by Amazon’s smart assistant, Alexa. The initial experience was disappointing due to technological limitations. Early smart assistants like Alexa, Microsoft’s Cortana, and Apple’s Siri used a multi-stage process to respond to queries, involving speech recognition, natural language processing, and text-to-speech conversion. This rule-based system struggled with complex queries.
The Limitations of Early Smart Assistants
The early versions of smart assistants were limited by their technological architecture. They couldn’t handle multi-step questions or complex tasks. For example, asking about flight arrangements with specific conditions was beyond their capabilities.
Alexa’s Upgrade: Nova Sonic
Amazon has now released Nova Sonic, a generative AI reasoning model that transforms Alexa’s utility and user experience. Alexa+, powered by Nova Sonic, will be available soon for $19.99/month (free for Amazon Prime members). Nova Sonic is built on a frontier, multimodal large language model (LLM) and incorporates reasoning and agentic AI.
How Nova Sonic Works
Nova Sonic is a significant improvement over previous technology. It’s a multimodal speech-to-speech AI model that can process speech and produce accurate outputs in a single step. It captures tone, inflection, and pacing, and can adjust its prosody to match human interaction. Nova Sonic is also an agentic AI, capable of acting on behalf of users to transact in the real world.
Impact and Opportunities
Amazon’s Nova Sonic is best-in-class in speech benchmarks like MLS and AMI. It’s about 80% less expensive to run than OpenAI’s GPT-4o, making it attractive for enterprise and consumer adoption. Nova Sonic will be available through Amazon Web Services (AWS), allowing companies to integrate its capabilities into their products and services.
This development is exciting not just for Amazon, but for the industry and society. We’re on the cusp of having widespread access to intelligent, agentic AIs that can act as personalized digital assistants, helping us recapture hours daily. Amazon’s pullback in stock price due to temporary factors presents an investment opportunity, with the company trading at an EV/Sales of 2.8 and EV/EBITDA of 11.7 while growing revenues at 10% annually and generating $47 billion in free cash flow yearly.
