Decoder with Nilay Patel
Amazon’s Panos Panay on the long road to Alexa’s AI overhaul
Mon, 03 Mar 2025
Panos Panay is in charge of devices and services at Amazon — that's everything from Alexa and Kindle to Ring, Eero, and even the Project Kuiper satellite internet service that's meant to compete with Starlink. He's led the team through giving Alexa a big AI infusion which is what drew him to Amazon after nearly 20 years with Microsoft. Like so many folks in tech, he sees AI as a platform shift that will change the way we use computers. Fair warning: We talk about Alexa a lot in this one, so you might want to go mute your Alexa device mics now. Links: With Alexa Plus, Amazon finally reinvents its best product | Verge The future of the Kindle with Panos Panay | Vergecast Amazon announces AI-powered Alexa Plus | Verge All of the announcements from Amazon’s Alexa Plus event | Verge Alexa Plus arrives with promise but plenty of questions | Verge Amazon Leadership Principles | Amazon How Amazon runs Alexa, with Dave Limp (2021) | Decoder Alexa loses her voice | YouTube Humane is shutting down the AI pin | Verge Mike Krieger wants to build AI products that are worth the hype | Verge Transcript: https://www.theverge.com/e/621232 Credits: Decoder is a production of The Verge and part of the Vox Media Podcast Network. Our producers are Kate Cox and Nick Statt. Our editor is Ursa Wright. The Decoder music is by Breakmaster Cylinder. Learn more about your ad choices. Visit podcastchoices.com/adchoices
Chapter 1: Who is Panos Panay and what is his role at Amazon?
Hello and welcome to Decoder. I'm Nilay Patel, editor-in-chief of The Verge, and Decoder is my show about big ideas and other problems. Today, I'm talking with Panos Panay, who's in charge of devices and services at Amazon. That's everything from Alexa to Ring security cameras and Hero Wi-Fi routers to the Project Kuiper satellite internet service that's meant to compete with Starlink.
That's a big remit, but this conversation is almost entirely focused on Alexa. Panos and I talked the day after he announced Alexa+, the new AI-powered version of Amazon's famous voice assistant. And I gotta tell you, this one gets pretty deep into the weeds of how it all works, and how Panos thinks about running his teams to make it happen.
We actually talked about Alexa so much in this episode that I think it's important to take a break here so that any of you with an Alexa device can go mute the microphone. Go ahead, we'll be waiting. All right, you back? So this is another one of those full circle Decoder episodes that I love so much.
I actually talked to Panos's predecessor running devices and services, Dave Limp, here on Decoder in 2021. If you're the type to follow executive shuffles, you know that Dave left Amazon to go work for Blue Origin. which is Jeff Bezos' rocket company, in 2023, and Panos was hired as his replacement from Microsoft, where he was running Surface and Windows.
Having now talked to them both, it's safe to say that they have very different approaches to running teams and products. So I was excited to dig into what changes Panos had made in order to make the new Alexa Plus happen. Now, Panos and I have known each other for a long time, which I think comes out in this conversation.
If you're a tech fan, you know that he was the Microsoft executive who really brought the Windows hardware market back to life by introducing the Surface line of tablets and laptops. Then he eventually ended up overseeing Windows itself. That was a big job, but you'll hear Panos say that the idea of infusing Alexa with AI really drew him to Amazon.
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Chapter 2: What changes did Panos Panay implement for Alexa Plus?
Like so many folks in tech, he sees AI as a platform shift that will change the way we use computers. And he's very aware that Amazon has a big advantage with the enormous number of Alexa devices that are already being used all over the world. Making all those devices a bit smarter and more capable with AI sounds easy, but actually doing it is fairly hard.
And we sat in the weeds of that execution for a while. There's a lot of ideas here, and a lot of different parts of Amazon needed to work together in new ways to bring those ideas to life. That is pure decoder bait, and Panos was game to really get into it. He even got a little emotional at some points.
One note before we start, Panos talks about experts a lot, and what he means in this context is the individual services that power different parts of the Alexa Plus experience, like music or photos. It's kind of like apps on a smartphone. You'll see what I mean as we go through this conversation, but if it gets confusing, just think app, and it'll click into place.
Okay, Panos Panay, head of products and services at Amazon. Here we go. Panos Panay, you told me that you don't care about your title, but technically it is SVP of Devices and Services at Amazon. Welcome back to Decoder.
Good to see you, man. I love being here.
Yeah, I'm really excited to talk to you. I was sitting in the audience yesterday as you were announcing Alexa Plus. I have a lot of questions about how it works, the feature set, where you think it's going.
But it occurred to me as I was sitting there watching you present it and then later as I was watching some of the demos of it working that to make it happen had to have required some big structure and culture rethinks inside of Amazon itself. And you joined about a year and a half ago. Decoder is all about structure and culture rethinking. So there's a lot here. There's a product to talk about.
But then there's the path of getting to that product. Is that how you see it, that you had to reset some parts of Amazon to get to Alexa Plus?
I don't think resetting Amazon. Like, Amazon's incredibly ambitious in so many ways. Always learning, changing. I mean, it's pretty powerful. The devices team, a little bit. First off, we hadn't really had a large-scale event, I don't think, as I understand it. Obviously, I wasn't there since pre-pandemic.
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Chapter 3: How is Alexa Plus different from previous versions?
Every single part of that show after the moment the mic starts has been, you know, very, very well thought through. Yesterday's event was the highest risk event I've ever done. Bar none. Really? And that was, yeah, bar none.
I mean, I watched you reintroduce laptops at Microsoft in competition with your partners.
Doesn't compare.
Really? Why so risky?
Because, you know, when you're basically doing hardware, you have fallbacks. You know, the demos aren't, they're not live, but you always can just go to the hardware. When you're reinventing or kind of re-architecting an entire service, there's no backup. It was the product. I think the only product video we had, like actual video, was the kids portion.
Because, you know, honestly, you're not kids in the audience. So sharing a kid's feature without some emotion is a waste of time. It's like, here's a kid's feature. Please write about it. So putting a little bit of emotion and storytelling in it, those were all real demos that all really happened. That was one of the principles of the event.
It wasn't like, let's go make up a fake story and let's see what, you know, we'll just put, you know, film in. That was the one area where it was just a, you know, it was like a, it wasn't a vision piece. It was the product, but it was the only area that wasn't live. And so there was, there was a lot of trepidation.
Like it was not the, it was not this, it was the hardest kind of event we've put together with the risk, risk profile wise.
Let's talk about Alexa Plus for just one second and get a sense of it. And then I want to talk about how you made it happen. I think there's a part that seems very obvious to people. You see an LLM. You see it interact with you. You're like, this thing is great at natural language input and output. Maybe it's going to lead us to AGI. Maybe it's not. Whatever.
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Chapter 4: What are the challenges in developing Alexa Plus?
You know, you asked a broader question, but let me just talk about Alexa. You want the element of connecting to thousands and thousands of APIs, partners that have been connected to Alexa forever. You're trying to manage hundreds of millions of customers who already have the product. You want to update as many of those devices as you possibly can. meaning you don't wanna leave a customer behind.
And you know, there will be some devices that are eight, nine years old that won't work, but everything else, most things will, like relative to what's used in the market today. So you gotta carry forward all that history because people still love Alexa. You know, we're still growing. We still have usage that's higher than you would expect. Can't leave those customers behind.
Like that's the worst thing. We focus on not doing that. So there's that element. Sitting on top of an LLM, you're now going, okay, just talking is just not that interesting, although awesome. Like having ambient conversation, I think it's a superpower moving forward for Alexa. It's different today on Alexa. It's like point, shoot, ask the question, hope to get the answer.
Yeah, you guys call it Alexa speak.
With my team a year ago, we'd be in meetings, in product meetings, and we'd be talking, And people would say, you know, let me show you the new Alexa with a demo and they would Alexa speak to it. And it was like, nope, speak normal. Like go to natural conversation. Don't adjust your speech to, for Alexa, like that's exactly what you don't want if you want natural conversation.
It's hard though, you know, you've been training people for, we've been training ourselves for 10 years. You know, calling a timer is, can you set a timer for eight minutes? Calling a timer on the new Alexa is, I'm making a ramen egg. gotcha, I'll set a timer for eight minutes. Like where she just proactively comes back and sets it.
I didn't demo that yesterday because I didn't want the timer headline, but it's really badass experience. You know, it's really cool. And so there's a level of like that transformation where I'm off topic, let me go back. At the end of the day, the LLM needs to be able to now, you know, it's the base layer. Then you got the next layer, which is just a series of different models.
picking the right model to do the job. And then that model is basically picking the right expert. And so the LLM plays a role, especially in the natural side of it. But as it makes it through the stack, it narrows down for accuracy, it narrows down for speed, it then narrows down for holding memory and personalizing it.
And now you just have a series of experts basically sitting on top, and one of them is conversational. That's not just an LLM. That's a series of – and by the way, if you look at any one of these other products, they're not just LLMs. They're basically – they're mainly, I don't know, overstating it, understating it, so not to be rude, but they're chatbots.
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Chapter 5: How does Amazon's corporate culture influence decision-making?
Got it. This expert needs to talk to that expert. Give you an example if you want it. There's nothing simple about it. It's why you haven't seen it. It's why it doesn't exist outside of videos. So the biggest thing I needed was to not do a demo, but to use the product live. Meaning you can code a demo just to be a demo. Like, you know, it's code. Like for that moment, make it look like.
type of quotes, but the principle was very, very clear. And this hasn't changed at Amazon, to be clear. The team's all in, like, we are gonna show the product. And that's what you saw.
One of the questions I have just about that orchestration layer, we've seen other companies try to build it. Even when Microsoft launched Bing with ChatGPT several years ago, they were talking about orchestration at that time. Is that something that's evolving in the same way in different places? Do you have a unique approach?
Yeah, I think we do. Is that competitive? I think it is. I think it's hugely competitive. It's pretty easy to invoke a single API off an LL. I mean, not easy. I don't want to discount anything. But let's say the expert is a grounding expert. I'm going to ground a local info. We're in New York. I know everything about New York. I'm going to make sure this conversation stays within New York.
calling one API, make sure you're grounded.
Is expert a term of art within Amazon?
It's just my term.
Okay.
It's like if you, as a team, we talk this way. So yeah, I don't want to overstate it. I think some people call them agents. Some people call them APIs. Some people call them, I don't know, grounding to a certain experience maybe. Our challenge was it's not enough. We already have that. Yeah. I mean, it's deterministic today with Alexa, but we already have it.
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Chapter 6: What is the pricing strategy for Alexa Plus?
I fully believe like this transformation's happening and Amazon's the leader in ambient AI, period, end of story, and in the home. And like, if we can connect all these things, that was, now we're talking whatever a year and a half ago when I was talking to Andy about joining Amazon. And he was just so ambitious about it. He's like, look, come in and do it. Let's do it. That is the tipping point.
There's a lot of nuance in that, but that was the tipping point. Like, we can change the world. You can think the scale, the relative level of investment, the ambition, the patience that Amazon brings, we're happy to talk about. Yeah, the answer to the first question is, sure, I come in, lay down a vision, re-architect the team a little bit.
Yeah.
Get the explicit focus on first thing we got to do is get Alexa right. Once we do that, we'll bring the hardware together. To get Alexa right, it takes music, photos, shopping. And these are photos, of course, under me, but you have across the company, you have music, video, shopping. We'll just use those three as huge tenants to the product. And, you know, those leaders are exceptional.
There's no, we're not gonna work together. It's the opposite. You know, and at Amazon, we set goals. They are cross company goals. And so the goals are set out, you know, from Amazon Nova, which is one of the anchoring points of the product to what music needs to be on the product.
Sure, you know, the expert is kind of a joint thing, the music expert, but ultimately like that music service has to be perfect and music team is killing it right now. Shopping, you know, all in. How to make it great. We didn't do a lot of shopping yesterday just because it would have been like a meme. I mean, of course, shopping. Like, you know, oh, yeah, it's going to be amazing.
And then video, same. And there's other areas. But we align and we go. But it does start with a commitment from me for sure. I'm in. I'm all in. I'm ready to re-architect it. It's not going to be easy. It's going to take time. Andy's patience, I would say, the company's patience to get it right for the customer is extraordinary, like extraordinary.
I mean, Andy was pushing me like, okay, you know, don't, you know, he wants urgency, of course, like you would expect from an Andy Jassy, but he also wants the right thing for the customer. And I mean, when you talk about customer obsession, like, let's get it right. Let's do it right and get it right. And we didn't move slow, even though, you know, you asked what's taken so long.
I don't see that, you know what I mean, from where I'm sitting. I know it feels late because there's been a lot of announcements, but I think we're here at the right time.
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