Amazon's iconic virtual assistant Alexa is set to undergo a significant transformation this October, with the help of a powerful large language model (LLM) developed by artificial intelligence (AI) company Anthropic. According to a report from Reuters on August 30, Alexa’s new capabilities will be driven primarily by Anthropic’s Claude AI, replacing much of Amazon’s own AI technology in a move that marks a major shift in the virtual assistant’s evolution.

Alexa Upgrades: Paid Version to Offer Enhanced Features

The upgrade won’t come without cost. Sources familiar with the matter revealed that Amazon plans to charge users between $5 to $10 per month for access to the updated version of Alexa, which will offer more advanced features. The classic version of Alexa will remain free, allowing users to continue utilizing the assistant’s current capabilities without any added fees.

Amazon originally intended to roll out these upgrades using its in-house AI software. However, delays in response times and difficulties with providing answers reportedly led the company to seek external support. A spokeswoman for Amazon commented on the collaboration, stating:

"When it comes to machine learning models, we start with those built by Amazon, but we have used, and will continue to use, a variety of different models—including (Amazon AI model) Titan and future Amazon models, as well as those from partners—to build the best experience for customers."

The upcoming premium version of Alexa is expected to provide enhanced conversational abilities, allowing it to respond to complex prompts and execute advanced requests. This will significantly improve Alexa’s ability to engage users in dynamic, multi-step conversations.

Anthropic Partnership and the Broader AI Landscape

Amazon's relationship with Anthropic deepened earlier this year, when the e-commerce giant fulfilled its $4 billion investment commitment in March 2024, securing a minority ownership stake in the AI developer. In return, Anthropic will leverage Amazon Web Services (AWS) as its cloud provider.

Anthropic has attracted significant interest from other major players in the tech industry as well. Alphabet, the parent company of Google, holds a $2 billion stake in the company, and some key talent, including John Schulman, co-founder of rival AI company OpenAI, has moved to Anthropic to focus on AI alignment efforts.

Regulatory Scrutiny Over AI Investments

The growing entanglement between Big Tech and AI startups like Anthropic has raised regulatory concerns. In August, the UK’s Competition and Markets Authority (CMA) launched an investigation into Amazon’s investment in Anthropic, questioning whether the move blurs the lines between acquisition and partnership.

Other tech giants, including Microsoft and OpenAI, have also faced scrutiny from European regulators, with concerns centered around market consolidation in the AI space.

Despite the regulatory challenges, Anthropic CEO Dario Amodei remains optimistic about the future of AI. Speaking on the Econ 102 podcast in August, he speculated that AI’s trajectory would more closely resemble a "corporate takeover" rather than the dystopian robot uprisings portrayed in popular culture.

As Amazon prepares to unveil its updated Alexa in October, it remains to be seen how consumers will react to the subscription-based model and the broader implications of this new chapter in the AI industry.