In a notable shift, Amazon has updated its Alexa devices’ privacy settings, making it so that all audio recordings are now sent to the cloud for processing. This change is effective immediately and means that users can no longer opt out of cloud storage—a choice that was available on some high-end Echo models before. If you decide not to store these recordings, keep in mind that you’ll lose access to personalization features like Voice ID, which relies on saved recordings.
Alexa, Amazon’s well-known voice assistant, is always listening for its ‘wake word.’ Once activated, it records your command and processes it to perform tasks like playing music. Despite advancements in on-device processing, cloud-based processing is still more accurate due to its superior computational power.
Amazon’s decision to tweak Alexa’s functionality is driven by a need to make its Echo devices more profitable. Although they’ve sold over 500 million units, Amazon reported a loss of more than $25 billion on the project from 2017 to 2021. To tackle this, the company has invested $8 billion in Anthropic, a competitor to OpenAI, and rolled out Alexa+, a new AI-powered system currently available only in the United States. Alexa+ promises more natural interactions and capabilities like booking flights.
Alexa+ is set to bring in revenue through subscription fees, offering its advanced features to Amazon Prime members or for a monthly fee of $19.99. More importantly, Alexa+ positions Amazon as a middleman between consumers and service providers, following the platform capitalism model seen in its e-commerce operations. Service providers might pay Amazon for customer referrals via Alexa+, much like how sellers pay to list products on Amazon.
In response to privacy concerns, Amazon has revamped Alexa’s settings, especially after a $25 million fine from the Federal Trade Commission for retaining children’s voice recordings. You can manage your data and adjust privacy settings through the Alexa app. However, as Alexa+ becomes more widespread, you’ll need to weigh the benefits of enhanced features against potential privacy trade-offs.
For those who prioritize privacy over functionality, there are alternatives to Alexa. The Home Assistant Voice Preview, for instance, processes recordings on-device and offers limited capabilities compared to Alexa. However, it caters to technically inclined users who value privacy.
Overall, Amazon’s strategic shift with Alexa is a classic example of platform capitalism, where control over digital infrastructure allows companies to extract significant value from their ecosystems.
