Amazon Picks Anthropic to Power Alexa 2.0

Amazon is turning to Anthropic’s artificial intelligence (AI) model Claude to power the revamped version of its voice assistant, Alexa, according to sources familiar with the matter.

The new version of Alexa, called “Remarkable,” is set to be released in October and will utilize generative AI to answer complex queries. Amazon plans to charge a monthly fee of $5 to $10 for the Remarkable version, while still offering the free “Classic” voice assistant.

The move to partner with Anthropic is notable for Amazon, as the company typically relies on its own in-house technology to maintain control over the user experience, data collection, and customer relationships. According to Reuters, the decision came after initial versions of Remarkable Alexa using in-house software struggled to respond to prompts effectively.

The paid version of Alexa aims to offer more advanced features, including carrying on conversations that build on prior questions and answers. It will also provide shopping advice, aggregate news stories, and fulfill more complex requests, such as ordering food or drafting emails. Additionally, Amazon hopes the new Alexa will serve as a home automation hub, remembering customer preferences and automating tasks like setting alarms and recording favorite TV shows.

The success of the paid version of Alexa is crucial for Amazon’s efforts to generate meaningful sales and catch up with its rivals in the AI race. The company has been striving to convince users to shop through Alexa to increase revenue, but these endeavors have largely been unsuccessful, and the division remains unprofitable. Amazon aims to demonstrate Alexa’s revenue-generating potential by 2024, and the revamped paid version is seen as a key strategy to achieve that goal.

While Amazon has not disclosed the number of active Alexa users, Bank of America analyst Justin Post estimated that there are approximately 100 million active users. He predicted that around 10% of these users might opt for the paid version of Alexa, potentially bringing in at least $600 million in annual sales. However, skepticism remains among Amazon workers, who question whether customers will be willing to pay an additional fee on top of their existing Prime memberships.

As PYMNTS reported, Anthropic is currently facing a copyright infringement lawsuit filed by three authors, who allege that the company built its AI models, including Claude, through the unauthorized use of copyrighted works. This lawsuit follows a previous legal action against Anthropic by Universal Music and two other labels, which claimed that the AI firm used artists’ songs without consent to create similar copies of the lyrics. The lawsuit highlights the increasing challenges surrounding copyright infringement in the AI industry.

Despite these legal challenges, Amazon is pushing forward with its plans to release the new version of Alexa in October. The company has not disclosed the details of its agreements with Anthropic, and it remains to be seen whether Amazon will have to pay additional fees for the use of Claude in Alexa.