Amazon is preparing to unveil a new and improved version of its Alexa voice assistant this October, just in time for the busy holiday shopping season in the U.S.
Internally known as “Remarkable,” this updated Alexa will be powered by Claude, an advanced AI model developed by Anthropic. The decision to switch to an external AI model arose from the limitations Amazon experienced with its own in-house software, according to sources close to the project.
The new Alexa will utilize cutting-edge generative AI technology to handle more intricate questions and interactions. Amazon plans to offer this enhanced version as a subscription-based service, priced between $5 and $10 per month. Meanwhile, the existing Alexa version will continue to be available at no cost. This shift toward a subscription model represents a substantial change for Amazon, signaling the company’s efforts to turn Alexa into a profitable service after years of struggling to generate significant revenue from the platform.
Amazon’s choice to use Claude, an externally developed AI model, marks a strategic departure from its usual approach of building everything internally. Typically, Amazon avoids relying on third-party technology to maintain control over data, customer behavior, and business strategy. However, this shift suggests that Amazon may have realized the need for more advanced AI capabilities than its in-house resources could deliver. Additionally, Anthropic’s connections to major tech players such as Apple and Microsoft may have influenced Amazon’s decision to collaborate rather than go it alone.
The launch of the “Remarkable” Alexa is expected to be showcased at Amazon’s annual devices and services event in September, though the company hasn’t announced the exact date. This event will also introduce Panos Panay, Amazon’s new head of the devices division, who recently took over from David Limp, a long-time executive at the company.
With this update, Alexa will become a more dynamic and engaging assistant, as it will feature a conversational mode that builds on previous interactions. Instead of merely responding to individual commands, the new Alexa will be able to hold context-aware conversations, potentially offering personalized shopping recommendations, news summaries, and enhanced home automation features. Whether customers are willing to pay for these added functionalities remains to be seen, especially since many are already paying for an Amazon Prime membership.
Amazon’s ambitions for the new Alexa are bold, but they also come with notable risks. Success will depend on the technology meeting high-performance standards and internal benchmarks. Amazon expects that even if only a small portion of current users opt for the premium version, it could still yield a significant new revenue stream. However, it’s uncertain if these optimistic projections will translate into the desired results.
The partnership with Anthropic, however, has drawn regulatory scrutiny, with the UK’s antitrust regulator reviewing Amazon’s collaboration with the AI developer. The outcome of this investigation and the timing of Amazon’s launch announcement could have a meaningful impact on the company’s future strategy.
Incorporating Anthropic’s AI into Alexa represents a major shift for Amazon, which has typically relied on developing its proprietary technologies. By aligning with an external AI partner, Amazon is following an industry trend toward collaborative AI development, aiming to enhance product competitiveness through strategic partnerships rather than solely relying on internal innovation.
As Amazon ventures into subscription-based, AI-enhanced services, the success of “Remarkable” Alexa will likely depend on how well it meets customer expectations for functionality and value. The company’s decision to pivot towards an external AI solution underscores its commitment to staying competitive in the fast-evolving AI landscape, and it sets the stage for a potentially transformative new chapter for Alexa.