Amazon’s New Alexa AI Project Comes With a $100M Price Tag

Amazon is pushing its voice assistant Alexa further into AI agent territory with a new initiative reportedly codenamed Moonraker, according to internal planning documents reviewed by Business Insider. The project builds on Alexa+, which already lets users book rides or purchase tickets through voice commands, by enabling the assistant to complete multiple linked tasks from a single instruction, such as arranging transportation and notifying a contact at the same time.

A Costly Bet on Autonomous AI

The ambition doesn’t come cheap. Internal documents indicate that Moonraker has become one of the priciest components of Amazon’s broader Alexa+ overhaul, with AI chip expenses exceeding $100 million this year alone. Some company leaders are reportedly questioning whether Amazon has overinvested in the AI models powering Alexa, citing concerns about the ongoing cost of running them. Documents even floated the idea of scaling back or delaying the project to rein in spending.

Growing Pains Behind the Scenes

The rollout hasn’t been smooth. Earlier testing of Alexa+ reportedly surfaced hallucinations and inaccurate responses, with one notable mishap involving a smart plug: an employee said the assistant switched off an entire power strip instead of just a light, which shut down an aquarium filter and led to a fish dying. Other testers described the assistant talking excessively or playing music unexpectedly in empty rooms.

Even so, user engagement has climbed. Amazon CEO Andy Jassy noted in his shareholder letter that people are now interacting with Alexa twice as often and completing three times more purchases through it since AI features launched, with the assistant now active across 600 million devices. Jassy described Alexa as still early in becoming a leading personal assistant.