Amazon Alexa is getting a generative AI upgrade later this month

Amazon was an early mover in the “digital assistant” field with Alexa, which was backed by cheap but capable hardware – smart speakers, smart displays and plenty of accessories for them. But it has let Alexa stagnate for several years now, both in terms of features and profitability.

Now, Amazon will leverage the massive improvements that generative AI has brought to the table to make Alexa smarter. This will be done in partnership with Anthropic, makers of the Claude AI, according to insiders who spoke with Reuters (Amazon has invested $8 billion in Anthropic).

A key upgrade in the new Alexa will be the ability to handle multiple prompts – the current version is mostly limited to simple one-off commands. It will also remember your preferences, which will come in handy when you ask it to play music or recommend a restaurant.

As an example of the multi-prompt capability, people familiar with the tech said that you can ask new Alexa to order you a burger then tell it to change the ingredients before the order is sent out. The generative AI model should also be able to act as an agent – meaning that it can act on behalf of the user without the user having to hold its hand the entire time.

It probably won’t be called “New Alexa”, by the way. Internally, the improved variant has been referred to as “Banyan” and “Remarkable Alexa”, though it’s not clear whether either of those will be the market name. “Classic Alexa” will remain available and it will be free, though Amazon has ceased development of new features for it.

Claude’s Android app

As for the new Alexa, Amazon reportedly considered charging $5 to $10 a month for it, though initially it might make it available for free to a limited number of users. Analysts at the Bank of America estimate that the new service can bring in $600 million a year if 10% of Alexa’s current active users sign up for a $5/month subscription. That will certainly help with Alexa’s profitability issues.

Insiders report that Amazon executives will meet on February 14 to decide how to proceed. If they give the green light, an event will be held on February 26, which will focus on Alexa. The event will feature Panos Panay of Microsoft Surface and Windows 11 fame.

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