Amazon is moving closer to its expected launch of a premium, $5-10/month new Alexa assistant. But according to a new report from Reuters, plans to use Amazon’s own in-house AI have failed, leading the company to turn to Anthropic’s Claude instead.

Premium Alexa AI coming in October with outsourced tech

AI assistants and chatbots continue to grow in usefulness. ChatGPT recently passed 200 million weekly users, for example.

But some of the early intelligent assistants, like Amazon’s Alexa, have gotten left behind in this recent AI gold rush.

That’s why Amazon has been working toward launching an upgraded, AI-infused version of Alexa. October is the expected release date.

It turns out, though, that not everything has gone according to plan.

Greg Bensinger writes for Reuters:

Amazon plans to charge $5 to $10 a month for its new “Remarkable” version of Alexa as it will use powerful generative AI to answer complex queries, while still offering the “Classic” voice assistant for free…

But initial versions of the new Alexa using in-house software simply struggled for words, sometimes taking six or seven seconds to acknowledge a prompt and reply…

That’s why Amazon turned to Claude, an AI chatbot developed by startup Anthropic, as it performed better than the online retail giant’s own AI models

It remains to be seen whether there’s a market for a premium version of Alexa. In my experience, Alexa has been a popular choice for users because of how affordable Amazon’s Echo devices are.

The shopper who chooses an Echo because it only costs $29 is highly unlikely to be interested in a $5-10/month subscription fee for the more ‘remarkable’ version of Alexa.

Apple and Amazon’s AI challenges

Business model challenges aside, what Amazon’s doing by outsourcing its AI tech is not all that different from Apple’s upcoming ChatGPT integration.

Apple no doubt considered building its own version of Siri that could compete with ChatGPT on ‘world knowledge,’ but decided it was better off partnering with OpenAI instead.

Perhaps Amazon going with a partnership is also a way to hedge against the new Alexa’s success. Investing in its own AI tech would undoubtedly be more expensive up front than whatever terms it’s struck with Anthropic for using Claude. Likely that deal ties payment to usage, guarding Amazon against big financial loss if the AI Alexa flops.

Are you interested in a paid Alexa service? Let us know in the comments.