(Preview) Amazon Introduces an AI-Powered Alexa, Is OpenAI the New BlackBerry?, The Social Costs of Removing Friction

Andrew and Ben react to Amazon's announcement for an AI-powered Alexa that has been "100 percent re-architected," and then answer mailbag questions about OpenAI's long-term future, LLM confidence, LLMs and the future of the English language, how a hardware business like Manna should approach aggregators, and the social costs of tech that optimizes for efficiency and eliminates friction. At the end: A word about the most exciting app of 2025.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Andrew Sharp?

  Hello and welcome to a free preview of Sharp Tech.

• 0:08Ben Thompson?

  You've made a brand promise and you've built in capabilities to do these sorts of things that you have to rebuild from scratch. If Brian uses his Alexa to turn his lights on and off, guess what the LLM-enabled version of Alexa better be able to do?

• 0:25Andrew Sharp?

  Right.

• 0:26Ben Thompson?

  It better be able to turn his lights on and off, right?

• 0:29Andrew Sharp?

  That's the thing, probabilistic household chore maintenance doesn't sound all that attractive. Like deterministic solutions.

• 0:38Ben Thompson?

  Right. Are they gonna turn on or off? Right? It's like Schrodinger's lights, right? It's like, you're not gonna know until you try. And so, so that's number one. They have all these capabilities that were built on the old way of doing things that they have to re-implement and they have to re-implement to the same level of reliability they had before, when that previous level of reliability entailed offloading a huge amount of the complexity to the user and not just in a technical perspective, but from a mental mindset perspective, where I blame myself when it doesn't work. And again, given what these things were capable of, that was a good place to have the product, where users had to do the work.

• 1:21Ben Thompson?

  But now if they want to do this, they have to redo that. And that is even before then you get to part two, which is just doing this stuff at scale. Like, how does the cost structure work? Like, right now you have a free version of ChatGPT, but if you actually want the decent functionality, you have to pay the subscription. Is there gonna be Alexa's subscription? Are you like, how are you gonna pay for the inference? How are you gonna do this at scale? At cost? All the like, obvious bits about doing an LLM, but I think it's that first part that's the most important. Is Alexa Plus going to turn Brian's lights off consistently? And it has to be able to do that, which is a significant increase in what our expectations of LLMs today. Part of the whole thing with people's LMs, they know they're gonna hallucinate.

• 2:04Ben Thompson?

  They know they're going to screw up. That's very different from our expectations of these, these digital canisters with disembodied voices inside of them.

• 2:13Andrew Sharp?

  Yes. No, exactly. I mean, it's a real technical challenge. And the Verge ads that nobody in the media got to try all the new capabilities associated with Alexa Plus. And they won't be able to try the new capabilities until late March at the earliest. A footnote on the Alexa Plus page indicates it won't be coming all at once either. Some features represented are in development and will be released in future updates was part of the demo. Which I think speaks to the complexity that you're describing there.

• 2:48Ben Thompson?

  It's exactly what Siri, right?

• 2:49Andrew Sharp?

  How tough a nut it is to crack. Yeah, no, exactly. And Apple Intelligence, I mean, we're months into the Apple Intelligence era. And we're still waiting for some of the features that we saw in the Apple Intelligence commercials six months ago. So all of this stuff is difficult. Andy Jassy did say that new beautiful hardware would be coming this fall.

• 3:12Ben Thompson?

  What Amazon is very well known for, beautiful, beautiful hardware.

• 3:16Andrew Sharp?

  Exactly. Just channeling the spirit of Jobs. So Bob in Michigan asks, is Alexa Plus too late? Is this like the Windows phone where network effects have taken off? And Amazon's success with Dumb Alexa makes it hard for them to make the jump. What do you think about that?

• 3:36Ben Thompson?

  It's pretty interesting. Let's, as a side note, let's talk about Siri. I think in the fullness of time, Apple probably wishes they had never launched Siri. And then today they could launch Siri undergirded by an L M. And it's this incredible experience and they could slowly build up the Siri. Like all the capabilities that are in Siri now, which doesn't work as well as Alexa and Google Voice. But the things like turning on your lights and turning those sorts of things. If you could start from scratch and from an Apple perspective, that would be totally fine. Because the iPhone has not been selling because of Siri capability. It's been selling because it's an iPhone.

• 4:18Ben Thompson?

  And so they could start rolling out a voice assistant in 2025 and be fine. And start from scratch with a completely new sort of capability. And honestly, maybe this what they should have done with Siri is have an option. That's like, if you want Siri as is, uh, that's one. We have a new voice called Joey. I mean, I don't know, whatever you want. And you could choose that in options. Joey will not be able to do anything Siri does. It can have a good conversation. It can't turn your lights on and off. We are going to add that over time. Instead of this sort of attempting to retrofit Siri. Maybe that would have been a better approach, but they could do that because they, the iPhones has sold itself for years and people buy iPhones for other reasons.

• 5:02Andrew Sharp?

  Selling in spite of Siri at this point, which is great. I mean, it's a great product.

• 5:06Ben Thompson?

  Exactly. It speaks, it's a great, that's exactly it. Alexa's different. I think Amazon does have a lot of devices in their house. From what I've seen anecdotally and have to some extent sort of read. The number one use case is listening to music and people really like this. They like just asking Siri to play stuff. Uh, it hurts my soul to hear the quality of the music that comes out of some of these devices.

• 5:31Andrew Sharp?

  Stuff, not Siri.

• 5:32Ben Thompson?

  Or whatever it is. Yeah, Alexa to play stuff, I should say. Yeah, yeah. Uh, uh, the, the sound quality is not great, but a lot of people just don't care. And they have this in their houses and maybe they use it again. Uh, if they're a little more advanced, they have it to turn the lights on and off or to open and close their curtains. And that's sort of about it. And I wonder if Amazon would be well served by all the, all these integrations and all these like bespoke use cases. They should just like dump all of them and sort of start out, but they do have an advantage that they have a lot of devices in-house. They've sold 300 million to your point, 80 million are used, uh, or, or 80 million people are using them or however those numbers work out. So I don't, there, there is a bit where that is an advantage.

• 6:14Ben Thompson?

  They have, if they can deliver something here, they have a base to build off of. So I can understand why it's taken so long for Alexa plus to come out. I think the problems are significant and I do think they have an advantage because they do have these, but they're not to completely retrain their users. So it's going to be, it's going to be a really hard thing to pull off. Uh, I don't think it's necessarily a Windows phone sort of device. Are people going to use Alexa plus? Instead of chat GPT on their computer, eh, may, maybe, I guess there's a possibility.

• 6:48Andrew Sharp?

  It's worth a shot.

• 6:49Ben Thompson?

  Yeah.

• 6:49Andrew Sharp?

  When you lay out all the challenges, I don't know why they didn't rebrand it more aggressively. There's Alexa and apparently Amazon users are going to have the option to use regular dumb Alexa. And if they don't want to try Alexa plus and Alexa plus will be available without charge to prime subscribers. $20 a month to everybody else, but I just feel like they're two pretty different products. And so I don't know why they didn't differentiate the name more. But I do wonder, I mean, it's still so early when you look at this market and there isn't really AI hardware in the market. That looks like it's going to predominate for the next couple of decades.

• 7:34Andrew Sharp?

  So I don't blame them for taking a shot and saying, well, maybe we're going to be the ones that people are talking to in the home. Since we already have all these devices in the home. I think it's worth pursuing, but I have no idea whether Amazon is actually going to be the long-term UX for AI for a lot of people. Uh, but it's reasonable to say that it's not going to be an app or a website. I don't think that's crazy.

• 7:58Ben Thompson?

  No, totally. I, I think you're totally right and I, I've long maintained. It's funny because the original Echo came out like four or five months after the Amazon phone came out. And I dumped all over the phone immediately and that was even before reviewers got a hold of it and realized it was one of the biggest pieces of garbage they'd ever used. And then so four months later, they come out the Echo and everyone is like prime for Amazon sucks at hardware. They're stupid. Why are they even doing this? And they just sort of, they took all their phone criticisms and then applied it to the, because I think they felt a little burn. Because we were excited at first and they got it. It sucks. Like, oh, now they're going to do another one. I had the opposite take, which is the moment they watched the phone. I'm like, this is a terrible idea. And then it actually also ended up being bad.

• 8:42Ben Thompson?

  I love the Echo idea and the reason was this is a real estate to try to break into phones at 2014 or 2015, whenever this was, was foolish. This is the Windows phone, Windows phone already tried and they'd failed and they had much better, a much better product than, than the Fire Phone. The home though, that's the one place you don't necessarily have your phone with you. Your phone has to charge. You put it, you know, hopefully you have some, a greater degree of health. You know, digital health than I do and you you actually set your phone down occasionally.

• 9:15Andrew Sharp?

  Some boundaries, absolutely.

• 9:16Ben Thompson?

  That's right. Do as I say, not as I do. So the and so number one, it was it was number two was a place that Amazon was associated with. You you buy stuff for your house. So that angle sort of made sense. And number three, voice talking, a voice interface in public has some obvious problems with it. Who wants to be out and about talking to their device, looking like a moron? And who wants to hear people talking to their voices and thinking, why am I stuck next to this moron? In your house, it's a private space. You can talk, you can have a conversation, you can ask it to play music.

• 9:56Ben Thompson?

  It it it just seemed like if you're going to build, this was a bit of a green filled opportunity. And they they grabbed that. And was the product good enough? Maybe not. Maybe it was it was too early. But it's a just as good of a place to take another swing at it. Again, especially for a voice interface. The home makes sense. They already have devices. The the device itself doesn't need to be that capable. All it's doing is just passing on it to to a cloud service to to do the response, which Amazon is obviously well suited to provide. So, no, I I I like them doing this. I think it's great. And I'm not surprised it took so long. And the execution is going to be hard, but might as well. Why not?

• 10:40Andrew Sharp?

  Yeah, I don't know whether I will be getting any of this new hardware in my house. But if we did, I could imagine two use cases. One, as my son grows up, if there's an AI that he can talk to and ask questions to.

• 10:54Ben Thompson?

  And get you out of your parenting duties?

• 10:56Andrew Sharp?

  Yeah, I could see him using it. I mean, we have a friend who's got like a six or seven year old, and he loves L L Ms. It's just like the answer machine. So if there's something you could talk to, absolutely. And then also, I'm not an Amazon fan, but my wife orders something from Amazon, like a household necessity, literally every day.

• 11:16Ben Thompson?

  I didn't know if you were every day or every hour. What unit of time you're gonna go with.

• 11:21Andrew Sharp?

  And postpartum, it's about every hour these days. But so maybe, I mean, that those are two use cases that would be accretive to Amazon's business. Certainly the second use case. So time will tell. Good luck.

• 11:35Ben Thompson?

  Until Amazon starts, yeah. What if Alexa starts hallucinating orders that your wife made? You won't even know. All the boxes are showing up anyways.

• 11:43Andrew Sharp?

  Well, hence the technical challenge. Good luck to all those guys. Maybe one day we'll see a YouTube video of this vaunted demo. But to keep it moving, Christian, and the subject line here was OpenAI is BlackBerry. A great way to frame a good take. He writes, All right, and that is the end of the free preview. If you'd like to hear more from Ben and I, there are links to subscribe in the show notes, or you can also go to sharp tech.fm. Either option will get you access to a personalized feed that has all the shows we do every week, plus lots more great content from Stratechery and the Stratechery Plus bundle.

• 12:25Andrew Sharp?

  Check it out. And if you've got feedback, please email us at email at sharp tech.fm.