Amazon is gearing up to roll out a revamped version of its Alexa voice assistant, which is expected to be available this October, right before the US shopping rush.
Internally referred to as “Remarkable,” the new technology will be powered by Anthropic’s Claude AI models. Sources close to the matter have indicated that this shift occurred due to the underperformance of Amazon’s in-house software.
The enhanced Alexa will operate using 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 of Alexa will remain free. This approach marks a significant change for Amazon and suggests that the company aims to turn this voice assistant into a profitable venture after years of limited success in generating revenue through this platform.
Amazon’s decision to quickly adopt an external model, Claude, indicates a strategic shift. Amazon typically prefers to build everything in-house to minimise its dependence on third-party vendors, thereby avoiding external influences on customer behaviour and business strategies, as well as external influences on who controls data. However, it seems that Amazon’s traditional strategy does not provide the massive AI capability needed, or perhaps Amazon has realised the need for more powerful AI. It is also worth noting that the involved AI developer, OpenAI, is affiliated with major technology companies like Apple and Microsoft in developing AI technologies.
The launch of the “Remarkable” Alexa is anticipated during Amazon’s annual devices and services event in September, though the company has not confirmed the exact date. This event will also mark the first public appearance of Panos Panay, the new head of Amazon’s devices division, who has taken over from long-time executive David Limp.
The updated version of Alexa would be a more interactive and intuitive assistant, as the new functionality would stem from its conversational mode. The assistant is envisioned to do more than just recognise patterns in people’s speech; it would be able to hold conversations built on previous interactions. The most likely features include personalised shopping advice, news aggregation, and more advanced home automation. As for whether customers would pay for Alexa, this likely depends on the final set of available features. The issue might be particularly pressing for Amazon, given that customers already pay for Prime membership.
The future for Alexa is quite ambitious, but it also bears significant risks. For the new version to be successful, internal performance benchmarks must be met. While estimates for “Remarkable” Alexa suggest that even a small percentage of current users paying for the premium version could become a substantial income stream for Amazon, the likelihood of achieving the expected outcomes remains uncertain.
However, Amazon’s partnership with Anthropic is currently under regulatory review, largely due to an investigation by the UK’s antitrust regulator. The impending upgrade announcement and the regulator’s response could significantly influence the company’s future activities.
Amazon’s initiative to adopt an AI solution developed by Anthropic marks a significant shift for the company, which previously focused on developing its proprietary technology. At this point, it is possible to view this move as part of the general trend in the industry to turn to partnerships regarding AI development to enhance the competitiveness of products.
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