The paid version of Alexa is envisioned to carry on conversations that build on previous interactions, while also allowing users to seek shopping advice, aggregate news stories, and handle complex tasks like ordering food or drafting emails from a single prompt, according to people familiar with the Alexa strategy. (Source: Image by RR)

Amazon Plans to Charge for New AI-Enhanced Alexa as It Competes in the AI Race

Amazon is developing a new version of its Alexa voice assistant, set for release in October, which will be powered by Anthropic’s Claude AI models rather than Amazon’s in-house technology. This move comes after initial versions of the revamped Alexa, using Amazon’s own AI, struggled with performance issues, leading the company to partner with Anthropic to ensure better responsiveness and functionality. Amazon plans to charge $5 to $10 per month for the new “Remarkable” version of Alexa, which will feature advanced capabilities like answering complex queries, providing shopping advice, and acting as a more intelligent home automation hub, while still offering the existing “Classic” version for free.

As reported in reuters.com, the decision to use an external AI model represents a significant shift for Amazon, which has traditionally preferred to rely on its own technology to maintain control over user experience and data. However, the need to keep up with competitors in the AI space, such as Microsoft and Apple, who have partnered with OpenAI, has pushed Amazon to adopt a more flexible approach. Despite this, Amazon faces skepticism from its own employees about whether customers will be willing to pay for a service that has been free, especially given the existing cost of Prime memberships.

The release of the upgraded Alexa is a crucial moment for Amazon, as the company aims to prove that the voice assistant can generate meaningful revenue and remain competitive in the rapidly evolving AI landscape. The new Alexa is expected to offer enhanced features, such as the ability to carry on conversations that build on previous interactions, provide personalized shopping recommendations, and manage complex tasks like ordering food or drafting emails. However, the success of these plans depends on the technology meeting internal benchmarks, and there is a possibility that the release could be delayed if it does not.

Amazon’s partnership with Anthropic also comes under scrutiny, with the UK antitrust regulator investigating the potential impact of the deal on competition. While Amazon has not disclosed the financial details of its agreement with Anthropic, the retailer has previously announced a $4 billion investment in the startup. The outcome of this partnership and the launch of the new Alexa will be closely watched as Amazon navigates the challenges of integrating advanced AI into its consumer products while addressing regulatory concerns.

read more at reuters.com