The reimagined Amazon Alexa will use Anthropic Claude’s AI models and will be paid

The upcoming new version of the Alexa voice assistant, dubbed Remarkable Alexa and Project Banyan, will use Anthropic’s Claude AI models rather than Amazon’s own AI technologies, Reuters writes, citing informed sources. Alexa 2 is expected to be released in October, and a preview of the service will be presented in September at Amazon’s annual event.

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Early versions of the updated Alexa assistant, powered by Amazon’s own AI technology, sometimes took six or seven seconds to acknowledge a request and respond, one of the people said. So Amazon decided to use Claude, an AI chatbot from startup Anthropic that has proven to perform better than the company’s own AI models.

The current version of Alexa allows you to set timers, play music, act as a central hub for controlling your smart home, and answer questions. However, Amazon’s attempts to convince users to make purchases using the voice assistant, which would increase revenue, have not been successful, and the Alexa development division remains unprofitable.

Unlike the current free version of the voice assistant, Remarkable Alexa will be available with a subscription ranging from $5 to $10 per month. The paid version of Alexa will offer more advanced features, including conducting conversations based on previous questions and answers. She will also provide shopping advice, gather news, and handle more complex requests such as ordering food or composing letters. Additionally, the new Alexa will serve as a home automation hub, remembering customer preferences and performing tasks such as setting alarms or recording favorite TV shows.

Amazon employees have expressed doubts about customers’ willingness to pay $60 to $120 a year for a service that is currently free. Still, Amazon is keen to show Alexa’s revenue potential and is banking on an updated version of the smart assistant as a key strategy to achieve that goal.

Amazon does not disclose the number of active Alexa users. According to Bank of America analyst Justin Post, Alexa has an audience of about 100 million people. According to the analyst’s forecast, about 10% of users could choose the paid version of Alexa, which would mean at least $600 million in additional annual revenue for the company.