Amazon’s Revamped Alexa

By Greg Bensinger
SAN FRANCISCO (Reuters) – Amazon’s revamped Alexa is set for release in October, aiming for the U.S. holiday season. This new version, referred to as “Remarkable,” will primarily utilize AI models from Anthropic’s Claude, moving away from Amazon’s in-house AI.

Pricing and Performance Issues

Amazon plans to offer this upgraded Alexa for a subscription fee of $5 to $10 a month, while the classic version remains free. Initial tests of the new system indicated significant lag in response times, prompting the switch to Claude due to superior performance.

Alexa’s Functionality

Alexa serves various functions, including setting timers, playing music, home automation, and answering questions. However, efforts to increase shopping through Alexa have been largely unsuccessful, leading to an unprofitable division for Amazon.

Future Strategy

2024 is crucial for Alexa’s profitability, and the new subscription model is viewed as necessary to keep pace with competitors like Microsoft and Apple, who have partnered with OpenAI for advanced AI features.

Anticipated Features

The upcoming paid version aims to provide personalized conversations, advice on shopping, and completion of complex tasks such as ordering food or drafting emails.

Market Impact

With an estimated 100 million active Alexa users, there’s potential for significant revenue, with projections of $600 million annually if 10% convert to the paid version.

Legal Scrutiny

Amazon’s investment in Anthropic and its impending deal are under investigation by the UK’s antitrust regulator.

The revamped Alexa is expected to be showcased during Amazon’s device event, but no date has been confirmed yet.