The development of a new artificial intelligence-based version of Amazon.com Inc's (NASDAQ:AMZN) voice assistant Alexa is reportedly facing significant challenges, according to internal memos.

What Happened: The new AI Alexa is experiencing latency problems, which could lead to customer dissatisfaction, Fortune obtained and reported the memo The delay between a user's request and the AI's response is a critical issue that needs to be resolved before the product's launch.

These latency issues are just one of several concerns raised by Amazon employees in internal communications over the past few months. These challenges highlight the obstacles Amazon must overcome to release the updated Alexa, a product crucial to the company's future.

The updated Alexa is a key indicator of Amazon's position in the race among Big Tech companies to dominate consumer-facing AI. Currently, Amazon is considered to be trailing behind its peers like Google parent Alphabet Inc (NASDAQ:GOOGL)(NASDAQ:GOOGL) and Microsoft Corp (NASDAQ:MSFT), as well as newcomers like OpenAI and Perplexity AI.

Despite these challenges, Amazon remains committed to its vision for Alexa. The company is working to enable more proactive and capable assistance on the over half a billion Alexa-enabled devices already in homes around the world.

Amazon did not immediately respond to Benzinga's request for comment.

Why It Matters: The development of the new AI Alexa is a part of Amazon's broader push into the AI space. The company has been making significant investments in AI, including the development of custom AI chips to reduce its reliance on Nvidia.

Amazon is also reportedly considering a second multi-billion-dollar investment in the AI startup Anthropic, which leverages its cloud services for training.

These investments are part of Amazon's broader AI strategy, which includes the launch of a new video-generation tool powered by AI, and the introduction of a generative AI-powered personal assistant codenamed 'Project Amelia.'

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.