Amazon is gearing up to unveil a revolutionary update to its voice assistant, Alexa, with a new version codenamed “Remarkable Alexa” or “Project Banyan.” Sources close to the development reveal that this next-generation Alexa will pivot from Amazon’s in-house AI models to leverage Anthropic’s Claude AI, promising a more responsive and advanced virtual assistant experience.

Image source: aboutamazon.com

Set to make its debut in October, with a sneak peek scheduled for Amazon’s September event, Remarkable Alexa aims to address the sluggish response times that plagued earlier versions. While previous iterations sometimes took up to seven seconds to process and respond to user requests, the integration of Claude AI—known for its superior performance—hopes to significantly reduce this delay.

Current Alexa users are familiar with the assistant’s capabilities to manage smart home devices, set timers, and play music. However, Amazon’s efforts to boost revenue through in-assistant purchases have largely fallen flat. To tackle this, the revamped Alexa will shift to a subscription model, priced between $5 and $10 per month. This premium version will offer enhanced features such as conversational memory, personalized shopping advice, and advanced home automation functions.

The subscription will also introduce capabilities for more complex tasks, like ordering food or drafting emails, and will provide a more intuitive user experience by remembering past interactions and preferences. Despite the potential improvements, some Amazon employees are skeptical about whether users will be willing to pay for a service that is currently free.

Nevertheless, Amazon is betting big on this overhaul as a key revenue driver. With an estimated 100 million active Alexa users, according to Bank of America analyst Justin Post, even a modest conversion rate of 10% to the paid version could generate a significant revenue boost—potentially adding up to $600 million annually. As the tech giant positions Remarkable Alexa as a cornerstone of its future strategy, all eyes will be on its September preview and October launch.

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