[Music] Amazon is making a major change to Alexa replacing its own AI with anthropics AI model Claude the new remarkable Alexa promises more advanced natural conversations but it also comes with a few surprises is this the next big step for smart Assistance or is Amazon taking a gamble with this move let's discuss and find out in today's video all right so Amazon has been working on this upgraded Alexa internally they're calling it remarkable Alexa or project banion for a while now and originally they were using their own AI technology for it but apparently things didn't
go so well in the testing phase according to reuter Amazon's in-house AI was having a lot of trouble responding quickly to user prompts I mean we're talking about a lag of up to six or 7 Seconds sometimes and in today's fast-paced world where we're all used to instant responses think chat GPT or Google Assistant that's just not going to cut it so Amazon decided to switch gears and use AI models from anthropic a San Francisco based AI research company that was actually founded by some exop AI folks anthropic has been making waves with its AI
models especially their Claude model which is pretty good at understanding context and maintaining more natural human-like conversations and apparently it performed way better than Amazon's own AI in those crucial tests Amazon has invested a whopping $4 billion dollar in anthropic which might explain why they're leaning on claud's Tech for this new Alexa all right so let's talk about what this new remarkable Alexa ala is actually going to do Amazon is saying this upgraded version is going to be a lot more advanced than what we've got right now the idea is that you'll be able to
have more complex and context aware conversations with Alexa for example you might ask it for shopping advice like what clothes you should pack for a Beach vacation in Bali or to aggregate news stories based on specific interests also Alexa will be able to handle more complex multi-step tasks from a single prompt like if you say Alexa order me a pizza draft an email to my boss and set up a reminder for my dentist appointment it will all be done but here's the catch Amazon plans to offer this upgraded Alexa as a paid subscription service so
unlike the classic Alexa that we've been using for free the remarkable Alexa is going to cost somewhere between $5 to $10 a month and just to be clear this won't be part of your Amazon Prime subscription so it'll be an extra cost on top of that Amazon is betting that these new AI driven features will be worth the price tag but it's definitely a gamble I mean asking people to pay for something that's been free all along is always a tricky move some folks inside Amazon are even skeptical that customers will go for it especially
since many are already shelling out $139 a year for Prime so why is Amazon doing this now well it all comes down to money and competition despite Alexa being super popular Amazon says they've sold over 500 million Alexa enabled devices The Voice Assistant division hasn't been making as much money as Amazon would like the company's leadership ship has been pushing hard for Alexa to start generating more revenue and they see 2024 as a crucial year to prove Alexa's worth in the market the idea here is that by offering a more advanced paid version of Alexa
Amazon can start turning it from a cost center basically something that costs more money to maintain than it brings in into a revenue generating machine and with around 100 million active Alexa users if even 10% of them decide to go for the paid version that could mean at least $600 million in annual revenue assuming they go with the lower end of the price range now this move to partner with anthropic is pretty interesting because it marks a bit of a shift in strategy for Amazon typically Amazon likes to build its own Tech from the ground
up which gives them full control over the user experience data collection and all that good stuff but with the rise of other Tech giants like Microsoft and Apple partnering up with open AI to integrate chat GPT into their products Amazon probably felt the Heat and realized they needed to step up their game to keep up and it's not just about keeping up appearances the AI race is heating up and companies are scrambling to offer the most advanced most intuitive and frankly most humanlike AI assistance out there the release of chat GPT last year really shook
things up showing that people want AI that can handle more natural flowing conversations not just simple command so Amazon like many others is trying to make sure they're not left behind so what else can we expect from this new Alexa for starters it sounds like it's going to be much better at integrating with other smart home devices and remembering user preferences think of it as your personal Butler who knows all your quirks and habits maybe you like your lights dimmed to a certain level at night or you always want the coffee maker to start brewing
at 700 a.m. sharp this new Alexa should be able to handle all that seamlessly and for those of you with kids there's talk that the new AI could be tailored to offer special interactions with children it will be able to engage with your kids in a more meaningful way maybe helping them with homework playing educational games or even telling bedtime stories that are a little more interactive than what we've seen before but some people are a bit worried about what this means for privacy and data collection by moving to a more advanced AI model and
potentially handling more sensitive information there are definitely some concerns about how that data will be used stored or potentially shared Amazon hasn't gone into detail about how they'll handle these concerns but it's definitely something to keep an eye on on now Alexa isn't the only AI project Amazon has been working on they've also been doing some interesting stuff with an internal AI assistant called Amazon q and if you haven't heard much about this one it's because it's more of an internal tool that's being used to streamline software development across the company but get this Amazon
Q has reportedly saved the company $260 million and 4,500 developer years how did it do that well by automating a lot of the repetitive processes that normally take developers a ton of time for example something like upgrading a system to a new version of java used to take 50 development days now it takes just a few hours that's a huge boost in productivity and efficiency freeing up developers to work on more complex creative tasks and if that wasn't enough Amazon is also making moves in AI robotics they recently hired the founders of a robotics startup
called covariant which is working on some pretty advanced stuff like robotic arms that can perform common Warehouse tasks the cool part here is that covariant is developing what they call a large language model for robots essentially they're teaching robots how to understand and execute commands in a way that's more intuitive and less mechanical Amazon's been bringing in some serious brain power to help push this forward including the founders of cavant who are now part of the Amazon team along with about a quarter of kavarian employees they're integrating this Tech into Amazon's existing robot Fleet which
should make their warehouse operations even more efficient so it's clear that Amazon is doubling down on AI across the board from improving Alexa with anthropics clawed AI to enhancing their internal processes with Amazon q and even stepping up their robotics game it's all about leveraging AI to make their services smarter faster and more integrated but it also means that we as consumers are going to see more AI in our everyday Liv lives whether that's through smarter Voice assistance more automated homes or even just better faster services from companies like Amazon it's an exciting time for
Tech but it's also a time to stay informed and aware of how these Technologies are developing and what they mean for our privacy our jobs and our daily routines so what do you guys think would you be willing to pay extra for a more advanced version of Alexa or do you think Amazon should just keep it free and find other ways to monetize it drop your thoughts in the comments below and don't forget to like And subscribe for more Ai and Tech updates thanks for tuning in and I'll see you in the next one
