Amazon's upcoming revamp of Alexa will lean heavily on Anthropic's Claude AI model, Reuters reports. This marks a significant pivot for the e-commerce giant as it prepares to launch a more capable, subscription-based voice assistant later this year.
The new service, dubbed "Remarkable Alexa" internally, has faced delays since its initial announcement last fall. Amazon's struggle to deliver on its promises using in-house AI technology led the company to partner with Anthropic, whose Claude 3.5 is currently one of the most advanced foundation models available.
Sources close to the matter reveal that early versions of the new Alexa, powered by Amazon's proprietary AI, suffered from major latency issues. The assistant often took six to seven seconds to process and respond to prompts, a performance gap that pushed Amazon to leverage Claude's superior capabilities.
Chris McKay
This collaboration follows Amazon's $4 billion investment in Anthropic last year, a move that promised Amazon customers early access to Anthropic's AI technology. However, this deal has attracted scrutiny from UK competition regulators, who launched a formal probe in August to investigate its impact on market competition. The regulators have 40 working days to decide whether to escalate the investigation to a more intensive level of scrutiny.
The partnership could mirror Apple's strategy, announced at WWDC in June, which integrates ChatGPT into Siri as part of the new Apple Intelligence suite in iOS 18 and macOS Sequoia. Both tech giants appear to be adopting hybrid models, balancing privacy and speed with advanced AI capabilities for complex tasks.
Chris McKay
The partnership is a win for AI research labs like OpenAI and Anthropic, which stand to benefit from increased exposure and potential upsells to premium offerings. However, Amazon's plan to monetize the new Alexa presents challenges.
The company intends to charge a subscription fee of $5 to $10 per month for the enhanced Alexa service, which promises more natural conversations, contextual awareness across interactions, and the ability to handle complex queries. A free tier with access to "classic" Alexa would remain available.
This pricing strategy has been met with skepticism from some Amazon employees, who question consumers' willingness to pay for Alexa. Users who have already invested in Alexa-enabled hardware may balk at spending an additional $60 to $120 per year for capabilities that are rapidly becoming standard in personal AI devices.
For Amazon, 2024 is a pivotal year to demonstrate Alexa's revenue-generating potential. The new subscription model and enhanced capabilities are crucial to this goal as the company strives to keep pace with AI advancements and maintain its edge in the smart home market. This effort comes amid reports that Apple is developing a new tabletop robot device to compete in the same space.