Amazon is set to release a revamped version of its Alexa voice assistant this October that will be powered by AI models from Anthropic’s Claude, rather than Amazon’s in-house AI technology, reports Reuters.
Amazon’s Echo device with Alexa
The decision to use Claude’s AI models comes after Amazon’s internal software reportedly struggled with performance issues during initial testing. Sources who spoke to Reuters claim that early versions using Amazon’s own AI had difficulty responding promptly, sometimes taking up to 6-7 seconds to acknowledge and reply to prompts.
This new AI-enhanced “Remarkable” Alexa is expected to offer more advanced capabilities compared to the current version. Users will reportedly be able to engage in more complex, context-aware conversations with the assistant.
Some potential features include providing shopping advice for specific scenarios like vacation clothing recommendations, aggregating news stories, executing multi-step tasks from a single prompt such as ordering food or drafting emails, and enhanced home automation with improved ability to remember and apply user preferences.
Amazon plans to offer this upgraded “Remarkable” Alexa as a paid subscription service, with pricing anticipated to be between $5 to $10 per month. In other words, it won’t be included in existing Prime memberships. The existing “Classic” Alexa service will remain available for free.
The move to partner with Anthropic for AI technology contrasts with Amazon’s typical strategy of relying on in-house developments, but similar partnerships such as Microsoft and Apple’s collaborations with OpenAI for ChatGPT integration indicate a broader shift in the tech industry.
Amazon has invested $4 billion in Anthropic, which may have influenced this decision, but the full details of the agreement between the two companies regarding the use of Claude in Alexa have not been disclosed.
Industry analysts estimate that there are approximately 100 million active Alexa users. If 10% of these users opt for the paid version, it could potentially generate at least $600 million in annual revenue for Amazon, assuming the lower end of the expected price range.
The launch of this new Alexa comes at a critical time for Amazon’s voice assistant division. Despite Alexa’s widespread adoption, with Amazon claiming 500 million Alexa-enabled devices sold, it has struggled to generate significant revenue. Amazon’s leadership has reportedly emphasized that 2024 is a crucial year for Alexa to demonstrate its ability to drive meaningful sales.
While Amazon has confirmed its use of various AI models, including its own Titan model and those from partners, it has not specifically commented on the use of Claude for the new Alexa. The official unveiling of the new AI-powered Alexa is expected to take place at Amazon’s annual devices and services event, typically held in September.
