Amazon Leverages Anthropic's Claude AI To Transform Alexa Before Holiday Season: Report (UPDATED)

Editor’s Note: The article has been updated with comments from Amazon and Anthropic.

In a significant move, Amazon.com Inc. (NASDAQ:AMZN) is reportedly gearing up to revamp its voice assistant, Alexa, using Anthropic’s Claude AI models, replacing its own AI. The new version, set for an October release, is designed to answer complex queries more efficiently.

What Happened: The overhauled Alexa, set to launch in October, will primarily utilize Anthropic’s Claude artificial intelligence models, reported Reuters. This move comes after the initial versions of the new Alexa, built with in-house software, struggled to respond to prompts promptly.

Amazon intends to charge $5 to $10 a month for its new “Remarkable” version of Alexa, which will leverage powerful generative AI to answer complex queries. The “Classic” voice assistant will continue to be available for free, the report added.

Amazon’s efforts to generate revenue through shopping via Alexa have not been very successful, making 2024 a pivotal year for Alexa to demonstrate its profitability. The revamped paid version is seen as a strategy to achieve this and compete with rivals.

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Amazon has generally refrained from depending on technology it hasn’t developed internally. However, it’s not alone in turning to a partner to enhance AI products. Companies like Microsoft Corp. and Apple have also partnered with OpenAI to power some of their products.

Amazon holds a minority stake in Anthropic, the developer of Claude AI.

While Anthropic declined to comment, an Amazon spokesperson commented that the company currently uses multiple machine learning models, and “will continue to use, a variety of different models—including Titan and future Amazon models, as well as those from partners—to build the best experience for customers.”

See Also: Apple’s September 9 ‘Glowtime’ Event Featuring iPhone 16 Launch Could Kickstart A ‘Historical Period,’ Says Wedbush Analyst Dan Ives

Why It Matters: Amazon’s partnership with Anthropic, a company it invested in back in September 2023, is currently under investigation by a U.K. regulator for potential anti-competitive concerns. This investigation could pose a setback to the artificial intelligence sector.

Earlier in June, Amazon announced plans for a major overhaul of its Alexa service, integrating conversational generative AI. This project, known internally as "Banyan," was set to introduce a two-tier system with a premium version potentially costing around $5 monthly. This marked the first major update to the voice assistant since its 2014 launch.

Despite Alexa’s presence in millions of households worldwide, the smart technology has been a significant cost to Amazon. The company launched its first Echo smart speaker with Alexa in 2014, but it wasn’t until 2017 that the smart speaker gained global popularity, thanks to third-party products and integrations. However, Alexa has been a financial drain on Amazon’s profits.

Just days before the announcement of Alexa’s overhaul, Anthropic released updates to the default system prompts for text-based dialogues on its AI platform, Claude.ai, as well as the Claude iOS and Android applications.

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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari