Amazon taps Claude from Anthropic to revamp Alexa's AI

Amazon's revamped Alexa, set to launch in October ahead of the U.S. holiday season, will be powered primarily by Anthropic's Claude artificial intelligence models, rather than its own AI, five people familiar with the matter told Reuters.

Amazon plans to charge $5 to $10 a month for its new “Remarkable” version of Alexa as it will use powerful generative artificial intelligence to answer complex queries, while offering the “Classic” voice assistant for free, Reuters reported in June.

But early versions of the new Alexa using in-house software simply struggled to find the words, sometimes taking six or seven seconds to acknowledge a message and respond, one of the people said.

That's why Amazon turned to Claude, an artificial intelligence chatbot developed by startup Anthropic, because it performed better than the online retail giant's own AI models, the people said.

Reuters based its report on interviews with five people with direct knowledge of Alexa's strategy. All of them declined to be named because they are not authorized to discuss non-public matters.

Alexa, accessed primarily through Amazon TVs and Echo devices, can set timers, play music, act as a hub for smart home controls and answer specific questions.

But Amazon's attempts to convince users to buy through Alexa to generate more revenue have been mostly unsuccessful and the division remains unprofitable.

As a result, senior management has stressed that 2024 is a critical year for Alexa to finally prove it can generate significant sales, and the revamped paid version is seen as a way to do that and keep pace with its rivals.

“Amazon uses many different technologies to power Alexa,” a company spokeswoman said in a statement in response to detailed questions from Reuters for this story.

“When it comes to machine learning models, we started with those built by Amazon, but we have used and will continue to use a variety of different models, including Titan (Amazon's AI model) and future models from Amazon, as well as those from our partners, to create the best experience for customers,” the spokeswoman said.

Anthropic, in which Amazon owns a minority stake, declined to comment for this story.

AI Partnerships

Amazon has generally avoided relying on technology it has not developed internally so it can ensure it has full control of the user experience, data collection and direct customer relationships.

But it would not be the only company to turn to a partner to improve its AI products. Microsoft and Apple, for example, have signed agreements with OpenAI to use its ChatGPT in some of their products.

Remarkable Alexa, as it is known internally, is expected to launch in October, and a preview of the new service will be available during Amazon's annual devices and services event typically held in September, the people said.

However, Amazon has not yet said when it plans to hold its unveiling event, which will be the first major public appearance by its new devices chief, Panos Panay, who was hired last year to replace longtime executive David Limp.

The widespread launch in late 2022 of ChatGPT, which provides near-instant full-sentence answers to complicated queries, set off a flurry of investment and corporate maneuvering to develop better AI software for a variety of functions, including image, video and voice services.

By comparison, Amazon's decade-old operating system, Alexa, seemed outdated, Amazon workers told Reuters.

While Amazon has a mantra of “working backward from the customer” to create new services, some people said that within the Alexa group, the emphasis since last year has been on keeping up with competitors in the AI ​​race.

Amazon workers have also expressed skepticism that customers would be willing to pay $60 to $120 a year for a service that is now free, on top of the $139 many already pay for Prime memberships.

Alexa Updates

As planned, the paid version of Alexa would engage in conversations with a user based on previous questions and answers, said the people familiar with Alexa's strategy.

The updated version of Alexa is designed to let users look up shopping advice, such as what clothes to buy for the holidays, and add news, the people said. And it's meant to carry out more complicated requests, such as ordering food or composing emails, all from a single message.

Amazon hopes the new Alexa will also be a super-powered home automation hub, remembering customer preferences so that, for example, alarms are set in the morning or the TV knows to record favorite shows even when a user forgets to do so, they said.

However, the company's plans for Alexa could be delayed or altered if the technology fails to meet certain internal benchmarks, the people said, without giving further details.

Bank of America analyst Justin Post estimated in June that there are roughly 100 million active Alexa users and that about 10% of them might opt ​​for the paid version of Alexa. Assuming the lowest monthly price, that would generate at least $600 million in annual sales.

Amazon says it has sold 500 million Alexa-enabled devices, but won't say how many active users there are.

In September last year, Amazon announced a deal to invest $4 billion in Anthropic and said its customers would get early access to its technology. Reuters was unable to determine whether Amazon would have to pay Anthropic extra for using Claude on Alexa.

Amazon declined to comment on the details of its dealings with the startup. Alphabet's Google has also invested at least $2 billion in Anthropic.

The retailer, along with Google, is facing a formal investigation by the UK antitrust regulator into the Anthropic deal and its impact on competition. It announced an initial inquiry in August and said it has 40 working days to decide whether to move it to a more rigorous scrutiny stage.

The Washington Post previously reported that the new Alexa will launch in October.

© Thomson Reuters 2024

(This story has not been edited by Agency staff and is auto-generated from a syndicated feed.)