Amazon and Anthropic Partner to Revolutionize Alexa’s AI

Amazon plans to launch a new version of Alexa powered by Anthropic’s Claude AI, to offer advanced generative AI features via a paid subscription model, signaling a strategic shift for the company ahead of the holiday season.

Amazon is getting ready to release a new version of its voice assistant, Alexa. In time for US holiday shopping, it should be released in October. Anthropic’s Claude AI models will power the new technology, which the company is calling “Remarkable.” Sources close to the situation say that this change happened because Amazon’s software wasn’t working well.

The improved Alexa will use advanced generative AI to handle more complicated questions. For between $5 and $10 a month, Amazon plans to charge a subscription fee for the new Alexa. The old version of Alexa will still be free.

With this strategy, Amazon is making a big change, suggesting that the company wants to make this voice assistant a profitable business after years of having trouble making money with it.

Amazon’s quick decision to use an outside model, Claude, shows a change in strategy. Amazon likes to build everything itself so that it doesn’t rely on outside vendors too much. This way, Amazon can avoid having outside influences on how customers act and how the company runs, as well as outside influences on who controls data.

However, it looks like Amazon’s usual approach doesn’t give them the huge AI power they need. Or maybe Amazon has realized they need stronger AI. Also, it’s important to note that OpenAI, the AI developer involved, works on AI technologies with big tech companies like Apple and Microsoft.

Amazon will likely launch “Remarkable” Alexa at their annual devices and services event in September, but the company hasn’t confirmed the exact date. This event will also be Panos Panay’s first public appearance since taking over as head of Amazon’s devices division from long-time executive David Limp.

Because the new features would come from its conversational mode, the updated version of Alexa would be a more useful and easy-to-use assistant. The assistant will be capable of more than just identifying speech patterns.

It will also be able to hold conversations that build on previous interactions. The most likely additions are personal shopping advice, news aggregation, and more advanced home automation.

The final set of features will likely determine whether people will pay for Alexa. Since people already pay for Amazon Prime, this issue may be especially important for the company.

Alexa’s Bold Future Plans

Alexa has big plans for the future, but they come with many risks. For the new version to succeed, the company must meet its performance goals.

Estimates for “remarkable” Alexa show that even a small portion of current users paying for the premium version could become a big source of income for Amazon. However, it’s still not clear how likely it is that these outcomes will happen.

Regulators are currently scrutinizing Amazon’s partnership with Anthropic, primarily due to the UK’s antitrust regulator’s investigation. The upcoming upgrade announcement and the regulator’s response could have a big effect on what the company does in the future.

Anthropic’s AI solution is a significant shift for Amazon, a company that previously concentrated on improving its technology. Currently, this move aligns with a broader industry trend of collaborating on AI development to enhance product competitiveness.