Amazon partners with Anthropic to enhance Alexa

11.09.2024

Amazon is preparing to launch a revamped version of its Alexa voice assistant, expected to be available this October, just in time for the US holiday shopping season.

Internally referred to as “Remarkable,” the new technology will be powered by Anthropic’s Claude AI models. Sources suggest this shift occurred due to the underperformance of Amazon’s in-house software.

The enhanced Alexa will use advanced generative AI to handle more complex queries. Amazon plans to offer the new Alexa as a subscription service, priced between $5 and $10 per month, while the classic version will remain free. This marks a strategic change for Amazon, indicating an effort to turn Alexa into a profitable platform after years of limited revenue from the service.

Amazon’s decision to adopt an external AI model like Claude signifies a strategic shift, as the company typically prefers to develop technology in-house to avoid reliance on third parties. However, it seems Amazon’s internal capabilities weren’t enough to meet the growing demand for advanced AI, or the company recognized the need for more powerful AI capabilities. It’s also noteworthy that OpenAI, a key player in AI development, is already working closely with other major tech companies like Apple and Microsoft.

The “Remarkable” Alexa is anticipated to be unveiled during Amazon’s annual devices and services event in September, although the exact date has not been confirmed. This event will also mark the debut of Panos Panay, Amazon’s new head of devices, following the departure of long-time executive David Limp.

The updated Alexa is expected to be a more interactive and intuitive assistant, with its new functionality stemming from a conversational mode. It will not only recognize patterns in speech but will be able to engage in conversations based on previous interactions. Likely features include personalized shopping recommendations, news aggregation, and more sophisticated home automation. However, whether users will be willing to pay for Alexa will likely depend on the final feature set, especially since many customers are already paying for Amazon Prime.

While the vision for Alexa is ambitious, it carries risks. For the new version to succeed, it must meet internal performance benchmarks. Although Amazon anticipates that even a small percentage of users opting for the premium version could create a significant revenue stream, the likelihood of this success remains uncertain.

Amazon’s partnership with Anthropic is also under regulatory review, particularly by the UK’s antitrust regulator. The upcoming product launch and the regulatory response will likely influence the company’s future strategy.

This move to adopt AI technology developed by Anthropic represents a notable shift for Amazon, which has historically focused on building its proprietary tech. It also reflects a broader industry trend toward partnerships in AI development to stay competitive.