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gen-ai-alexa-to-use-anthropic-tech-after-it-“struggled-for-words”-with-amazon’s

Gen AI Alexa to use Anthropic tech after it “struggled for words” with Amazon’s

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Subscription Alexa —

Amazon’s $4 billion investment in Anthropic has been under investigation.

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Amazon Alexa using generative AI on an Echo Show

Enlarge / Generative AI Alexa asked to make a taco poem.

The previously announced generative AI version of Amazon’s Alexa voice assistant “will be powered primarily by Anthropic’s Claude artificial intelligence models,” Reuters reported today. This comes after challenges with using proprietary models, according to the publication, which cited five anonymous people “with direct knowledge of the Alexa strategy.”

Amazon demoed a generative AI version of Alexa in September 2023 and touted it as being more advanced, conversational, and capable, including the ability to do multiple smart home tasks with simpler commands. Gen AI Alexa is expected to come with a subscription fee, as Alexa has reportedly lost Amazon tens of billions of dollars throughout the years. Earlier reports said the updated voice assistant would arrive in June, but Amazon still hasn’t confirmed an official release date.

Now, Reuters is reporting that Amazon will no longer use its own large language models as the new Alexa’s primary driver. Early versions of gen AI Alexa based on Amazon’s AI models “struggled for words, sometimes taking six or seven seconds to acknowledge a prompt and reply,” Reuters said, citing one of its sources. Without specifying versions or features used, Reuters’ sources said Claude outperformed proprietary software.

In a statement to Reuters, Amazon didn’t deny using third-party models but claimed that its own tech is still part of Alexa:

Amazon uses many different technologies to power Alexa.

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.

Amazon has invested $4 billion in Anthropic (UK regulators are currently investigating this). It’s uncertain if Amazon’s big investment in Anthropic means that Claude can be applied to Alexa for free. Anthropic declined to comment on Reuters’ report.

The new Alexa may be delayed

On Monday, The Washington Post reported that Amazon wants to launch the new Alexa in October, citing internal documents. However, Reuters’ sources claimed that this date could be pushed back if the voice assistant fails certain unspecified internal benchmarks.

The Post said gen AI Alexa could cost up to $10 per month, according to the documents. That coincides with a June Reuters report saying that the service would cost $5 to $10 per month. The Post said Amazon would finalize pricing and naming in August.

But getting people to open their wallets for a voice assistant already associated with being free will be difficult (free Alexa is expected to remain available after the subscription version releases). Some Amazon employees are questioning if people will really pay for Alexa, Reuters noted. Amazon is facing an uphill battle with generative AI, which is being looked at as a last shot for Alexa amid big competition and leads from other AI offerings, including free ones like ChatGPT.

In June, Bank of America analysts estimated that Amazon could make $600 million to $1.2 billion in annual sales with gen AI Alexa, depending on final monthly pricing. This is under the assumption that 10 percent of an estimated 100 million active Alexa users (Amazon says it has sold 500 million Alexa-powered gadgets) will upgrade. But analysts noted that free alternatives would challenge the adoption rate.

The Post’s Monday report said the new Alexa will try winning over subscribers with features like AI-generated news summaries. This Smart Briefing feature will reportedly share summaries based on user preferences on topics including politics, despite OG Alexa’s previous problems with reporting accurate election results. The publication also said that gen AI Alexa would include “a chatbot aimed at children” and “conversational shopping tools.”

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Amazon is bricking primary feature on $160 Echo device after 1 year

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Echo Show 8 Photos Edition —

Smart display will soon default to showing ads after three hours.

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echo show 8 video call

In September of 2023, Amazon announced the Echo Show 8 Photos Edition. It looked just like the regular Echo Show 8 smart display/speaker but cost $10 more. Why? Because of its ability to show photos on the home screen for as long as you want—if you signed up for a $2 monthly subscription to Amazon’s PhotosPlus. Now, about a year after releasing the Echo Show 8 Photos Edition, Amazon is announcing that it’s discontinuing PhotosPlus. That means Echo Show 8 Photos Edition users will be forced to see ads instead of their beloved pics.

As per The Verge yesterday, Amazon started sending PhotosPlus subscribers emails saying that it will automatically cancel all PhotosPlus subscriptions on September 12 and will stop supporting PhotosPlus as of September 23. PhotosPlus, per Amazon’s message, “makes photos the primary home screen content you see on your Echo Show 8 and includes 25 GB of storage with Amazon Photos,” Amazon’s online photo storage offering. Users can continue using the 25GB of Amazon Photos storage after September.

However, users will no longer be able to make photos the indefinite home screen on the Alexa gadget. After September, their devices will no longer have the “photo-forward mode” that Amazon advertised for the Echo Show 8 Photos Edition. The photo-forward mode, per Amazon, let people make “selected personal photos the primary rotating content on the ambient screen” (photos rotated every 30 seconds). Now, Echo Show 8 Photo Editions will work like a regular Echo Show 8 and default to showing ads and promotions after three hours.

“The end of my Echo Show 8”

Amazon never explained why owners of the standard Echo Show 8 couldn’t use PhotosPlus or the photo-forward mode. The devices looked identical. It’s possible that the Photos Edition used extra hardware, but it’s likely that the Photos Edition’s $10 premium was meant to offset the lost ad revenue.

But now people who bought into the Photos Edition could feel like the victims of a bait-and-switch. After paying $10 extra to get a device capable of displaying photos indefinitely instead of ads, they’ll be forced into the same user experience as the cheaper Echo Show 8.

“I really have zero interest in keeping it if it’s going to show ads all day,” Reddit user Misschiff0 said in response to the news. “Sadly, this is the end of my Echo Show 8.”

Other apparent customers have discussed abandoning the Echo line entirely in response to the changes. As Reddit user Raybreezer wrote:

I’m dying for a replacement smart home speaker with a screen that’s not Google. Every day I hate the echo [sic] line more and more.

PhotosPlus was always a tough sell

Amazon may make more money selling ads than it has selling PhotosPlus subscriptions and relevant hardware. It was always somewhat peculiar that PhotosPlus only applied to one Amazon device. Amazon might have been considering extending PhotosPlus to other devices but didn’t get enough interest or money from the venture. Getting people to pay monthly for a feature that some would argue the gadget should already support out of the box seems difficult.

Amazon spokesperson Courtney Ramirez told The Verge that Amazon discontinued the Echo Show 8 Photos Edition in March, noting that Amazon regularly evaluates “products and services based on customer feedback” and that users can still get their Echo Show 8 Photos Editions to show photos.

But it’s hard to overlook Amazon discontinuing a product after about only six months and then bricking the device’s exclusive feature only a year after release. The short-lived Echo Show 8 Photos Edition and PhotosPlus service are joining Amazon’s graveyard of gadgets, which include the discontinued Astro business robot, Just Walk Out, Amazon Glow, Fire Phone, Dash buttons, and the Amazon Smart Oven.

Amazon’s quick discontinuation of the smart display and PhotosPlus is emblematic of its struggles to find a lucrative purpose and significant revenue source for Alexa-powered devices. Reports have claimed that Alexa went without a profit timeline for years and has cost Amazon tens of billions of dollars.

Amazon is banking on the upcoming generative AI version of Alexa being so good that people will pay a subscription fee to use it. But with tough competition, generative AI implementations varying in accuracy and relevance, and some consumers already turned off by consumer gadgets’ AI marketing hype, it’ll be hard for Amazon to turn things around. A premium-priced Alexa device losing its main feature after a year doesn’t instill confidence in future Amazon products either.

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Alexa had “no profit timeline,” cost Amazon $25 billion in 4 years

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In this photo illustration, Echo Dot smart speaker with working Alexa with blue light ring seen displayed.

The Amazon business unit that focuses on Alexa-powered gadgets lost $25 billion between 2017 and 2021, The Wall Street Journal (WSJ) reported this week.

Amazon claims it has sold more than 500,000 Alexa devices, which included Echo speakers, Kindle readers, Fire TV sets and streaming devices, and Blink and Ring smart home security cameras. But since debuting, Alexa, like other voice assistants, has struggled to make money. In late 2022, Business Insider reported that Alexa was set to lose $10 billion that year.

WSJ said it got the $25 billion figure from “internal documents” and that it wasn’t able to determine the Devices business’s losses before or after the shared time period.

“No profit timeline”

WSJ’s report claims to offer insight into how Devices was able to bleed so much money for so long.

For one, it seems like the business unit was allowed some wiggle room in terms of financial success in the interest of innovation and the potential for long-term gains. Someone the WSJ described as being “a former longtime Devices executive” said that when Alexa first started, Amazon’s gadgets team “didn’t have a profit timeline” when launching products.

Amazon is known to have sold Echo speakers for cheap or at a loss in the hopes of making money off Alexa later. In 2019, then-Amazon Devices SVP Dave Limp, who exited the company last year, told WSJ: “We don’t have to make money when we sell you the device.” WSJ noted that this strategy has applied to other unspecified Amazon devices, too.

People tend to use Alexa for free services, though, like checking the weather or the time, not making big purchases.

“We worried we’ve hired 10,000 people and we’ve built a smart timer,” an anonymous person that WSJ said is a “former senior employee” said.

An Amazon spokesperson told WSJ that more than half of people with an Echo have shopped with it but wouldn’t provide more specifics. Per “former employees on the Alexa shopping team” that WSJ spoke with, however, the amount of shopping revenue tied to Alexa is insignificant.

In an emailed statement, an Amazon spokesperson told Ars Technica, in part:

Within Devices & Services, we’re focused on the value we create when customers use our services, not just when they buy our devices. Our Devices & Services organization has established numerous profitable businesses for Amazon and is well-positioned to continue doing so going forward.

Further hindering Alexa’s revenue are challenges in selling security and other services and the limitation of ad sales because they annoy Alexa users, WSJ reported.

Massive losses also didn’t seem to slow down product development. WSJ claimed the Devices business lost over $5 billion in 2018 yet still spent money developing the Astro consumer robot. That robot has yet to see general availability, while a business version is getting bricked just 10 months after release. Amazon Halo health trackers, which have also been bricked, and Luna game-streaming devices were also developed in 2019, when the hardware unit lost over $6 billion, per WSJ.

Amazon has laid off at least 19,000 workers since 2022, with the Devices division reportedly hit especially hard.

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Amazon virtually kills efforts to develop Alexa Skills, disappointing dozens

alexa, Amazon, amazon alexa, developers, generative ai, Tech / /

disincentives —

Most devs would need to pay out of pocket to host Alexa apps after June.

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amazon echo dot gen 4

Enlarge / The 4th-gen Amazon Echo Dot smart speaker.

Amazon

Alexa hasn’t worked out the way Amazon originally planned.

There was a time when it thought that Alexa would yield a robust ecosystem of apps, or Alexa Skills, that would make the voice assistant an integral part of users’ lives. Amazon envisioned tens of thousands of software developers building valued abilities for Alexa that would grow the voice assistant’s popularity—and help Amazon make some money.

But about seven years after launching a rewards program to encourage developers to build Skills, Alexa’s most preferred abilities are the basic ones, like checking the weather. And on June 30, Amazon will stop giving out the monthly Amazon Web Services credits that have made it free for third-party developers to build and host Alexa Skills. The company also recently told devs that its Alexa Developer Rewards program was ending, virtually disincentivizing third-party devs to build for Alexa.

Death knell for third-party Alexa apps

The news has left dozens of Alexa Skills developers wondering if they have a future with Alexa, especially as Amazon preps a generative AI and subscription-based version of Alexa. “Dozens” may sound like a dig at Alexa’s ecosystem, but it’s an estimation based on a podcast from Skills developers Mark Tucker and Allen Firstenberg, who, in a recent podcast, agreed that “dozens” of third-party devs were contemplating if it’s still worthwhile to develop Alexa skills. The casual summary wasn’t stated as a hard fact or confirmed by Amazon but, rather, seemed like a rough and quick estimation based on the developers’ familiarity with the Skills community. But with such minimal interest and money associated with Skills, dozens isn’t an implausible figure either.

Amazon admitted that there’s little interest in its Skills incentives programs. Bloomberg reported that “fewer than 1 percent of developers were using the soon-to-end programs,” per Amazon spokesperson Lauren Raemhild.

“Today, with over 160,000 skills available for customers and a well-established Alexa developer community, these programs have run their course, and we decided to sunset them,” she told the publication.

The writing on the wall, though, is that Amazon doesn’t have the incentive or money to grow the Alexa app ecosystem it once imagined. Voice assistants largely became money pits, and the Alexa division has endured recent layoffs as it fights for survival and relevance. Meanwhile, Google Assistant stopped using third-party apps in 2022.

“Many developers are now going to need to make some tough decisions about maintaining existing or creating future experiences on Alexa,” Tucker said via a LinkedIn post.

Alexa Skills criticized as “useless”

As of this writing, the top Alexa skills, in order, are: Jeopardy, Are You Smarter Than a 5th Grader?, Who Wants to Be a Millionaire?, and Calm. That’s not exactly a futuristic list of must-have technological feats. For years, people have wondered when the “killer app” would come to catapult Alexa’s popularity. But now it seems like Alexa’s only hope at that killer use case is generative AI (a gamble filled with its own obstacles).

But like Amazon, third-party developers found it hard to make money off Skills, with a rare few pointing to making thousands of dollars at most and the vast majority not making anything.

“If you can’t make money off it, no one’s going to seriously engage,” Joseph “Jo” Jaquinta, a developer who had made over 12 Skills, told CNET in 2017.

By 2018, Amazon had paid developers millions to grow Alexa Skills. But by 2020, Amazon reduced the amount of money it paid out to third-party developers, an anonymous source told Bloomberg, The source noted that the apps made by paid developers weren’t making the company much money. Come 2024, the most desirable things you can make Alexa do remain basic tasks, like playing a song and apparently trivia games.

Amazon hasn’t said it’s ending Skills. That would seem premature considering that its Alexa chatbot isn’t expected until June. Developers can still make money off Skills with in-app purchases, but the incentive is minimal.

“Developers like you have and will play a critical role in the success of Alexa, and we appreciate your continued engagement,” Amazon’s notice to devs said, per Bloomberg.

We’ll see how “critical” Amazon treats those remaining developers once its generative AI chatbot is ready.

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“Alexa is in trouble”: Paid-for Alexa gives inaccurate answers in early demos

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Amazon Echo Show 8 with Alexa

Enlarge / Amazon demoed future generative AI capabilties for Alexa in September.

“If this fails to get revenue, Alexa is in trouble.”

A quote from an anonymous Amazon employee in a Wednesday Business Insider report paints a dire picture. Amazon needs its upcoming subscription version of Alexa to drive revenue in ways that its voice assistant never has before.

Amazon declined Ars’ request for comment on the report. But the opening quote in this article could have been uttered by anyone following voice assistants for the past year-plus. All voice assistants have struggled to drive revenue since people tend to use voice assistants for basic queries, like checking the weather, rather than transactions.

Amazon announced plans to drive usage and interest in Alexa by releasing a generative AI version that it said would one day require a subscription.

This leads to the question: Would you pay to use Alexa? Amazon will be challenged to convince people to change how they use Alexa while suddenly paying a monthly rate to enable that unprecedented behavior.

Workers within Amazon seemingly see this obstacle. Insider, citing an anonymous Amazon employee, reported that “some were questioning the entire premise of charging for Alexa. For example, people who already pay for an existing Amazon service, such as Amazon Music, might not be willing to pay additional money to get access to the newer version of Alexa.”

“There is tension over whether people will pay for Alexa or not,” one of the anonymous Amazon workers reportedly said.

Subscription-based Alexa originally planned for June release

Amazon hasn’t publicly confirmed a release date for generative AI Alexa. But Insider’s report, citing “internal documents and people familiar with the matter,” said Amazon has been planning to release its subscription plan on June 30. However, plans for what Insider said will be called “Alexa Plus” and built on “Remarkable Alexa” technology could be delayed due to numerous development challenges.

According to the report, the Remarkable Alexa tech has been being demoed by 15,000 customers and currently succeeds in being conversational but is “deflecting answers, often giving unnecessarily long or inaccurate responses.”

In September, then-SVP of devices and services at Amazon David Limp demoed Alexa understanding more complex commands, including Alexa not requiring the “Hey Alexa” prompt and being able to understand multiple demands for multiple apps through a single spoken phrase.

Insider reported: “The new Alexa still didn’t meet the quality standards expected for Alexa Plus, these people added, noting the technical challenges and complexity of redesigning Alexa.”

“Legacy constraints”

According to the report, people working on the original Alexa insisted on using what they had already built for the standard voice assistant with the paid-for version, resulting in a bloated technology and “internal politics.”

However, the original Alexa is based on a natural language model with multiple parts doing multiple things, compared to the colossal large language model of generative AI Alexa.

Now, generative AI Alexa is reportedly moving to a new technological stack to avoid the “legacy constraints” of today’s Alexa but potentially delaying things.

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