In a significant move, Amazon.com Inc. (AMZN) is preparing to revamp its voice assistant, Alexa, by integrating Anthropic’s powerful Claude AI models. This decision comes after initial versions of the revamped Alexa, built with Amazon’s internal software, struggled to respond efficiently to user requests.
The new Alexa, set to launch in October, will primarily leverage Claude AI to offer improved capabilities in answering complex queries. Amazon plans to charge a monthly subscription fee of $5 to $10 for its “Remarkable” version of Alexa, which will utilize generative AI. The “Classic” version of Alexa will remain available for free. This move represents a shift for Amazon, which traditionally focuses on developing technology internally. The company is looking to generate revenue through Alexa by introducing a premium version, emphasizing its profitability potential in 2024.
Amazon’s partnership with Anthropic, a company in which Amazon holds a minority stake, is currently under scrutiny by a UK regulator for potential anti-competitive practices. This investigation could hinder the advancement of the artificial intelligence sector.
This news follows Amazon’s June announcement of a major overhaul for Alexa, aimed at incorporating conversational generative AI into the service. This project, internally known as “Banyan,” was set to introduce a two-tier system with a premium version potentially costing around $5 monthly. This would mark the first significant update to Alexa since its 2014 launch.
Despite its wide presence in households worldwide, Alexa has been a considerable financial burden for Amazon. The company launched its first Echo smart speaker with Alexa in 2014, but it was not until 2017 that the smart speaker gained widespread popularity due to third-party integrations. However, Alexa has consistently impacted Amazon’s profits, making the upcoming revamped version crucial for generating revenue and justifying its continued existence.
