Amazon’s Alexa AI Upgrade Sparks Cost Concerns and Mishaps

Amazon is pushing to make Alexa a more autonomous AI agent through a new initiative called Moonraker, according to internal planning documents reviewed by Business Insider. CEO Andy Jassy has touted Alexa’s massive reach, noting the assistant now operates across 600 million active devices spanning homes, cars, and offices.

Multi-Step Tasks Come at a Price

Moonraker would let Alexa complete complex, multi-step requests in a single command, such as booking a ride while simultaneously texting a friend. This marks a shift from simple voice commands toward genuine agentic behavior. However, the ambition carries a steep price tag: the upgrade has reportedly become one of the costliest elements of Amazon’s broader Alexa+ overhaul, with AI chip expenses exceeding $100 million this year alone. Some Amazon leaders are reportedly questioning whether the company has overinvested in the models powering Alexa, citing concerns over high operating costs. Internal documents even proposed scaling back or delaying the project to control spending.

Beta Testing Reveals Unexpected Failures

The rollout hasn’t been smooth. Earlier testing of Alexa+ surfaced hallucinations and inaccurate responses, including one striking incident where the assistant shut off an entire power strip instead of a single light, cutting power to an aquarium filter and killing a tester’s fish. Other testers reported Alexa talking nonstop despite requests to stop, and music blaring at full volume in empty rooms. One employee described the assistant’s behavior as difficult to tolerate during testing.

Despite these setbacks, user engagement has grown substantially. Jassy’s shareholder letter noted that customers are now interacting with Alexa twice as often and completing three times more purchases since AI features launched. Jassy called Alexa’s journey toward becoming a top personal assistant still in its early stages.