Amazon's revamped Alexa due for release in October ahead of the U.S. holiday season will be powered primarily by Anthropic's Claude artificial intelligence models, rather than its own AI, five people familiar with the matter.

Amazon plans to charge $5 to $10 a month for its new "Remarkable" version of Alexa. It will use powerful generative AI to answer complex queries while offering the "Classic" voice assistant for free.

But initial versions of the new Alexa using in-house software struggled for words, sometimes taking six or seven seconds to acknowledge a prompt and reply, one of the people said.

That's why Amazon turned to Claude, an AI chatbot developed by startup Anthropic, as it performed better than the online retail giant's own AI models, the people said.

Reuters based this story on interviews with five people with direct knowledge of the Alexa strategy. All declined to be named as they are not authorized to discuss non-public matters.

Alexa, accessed mainly through Amazon televisions and Echo devices, can set timers, play music, act as a central hub for smart home controls, and answer one-off questions.

ALEXA UPGRADES

As envisioned, the paid version of Alexa would carry on conversations with a user that builds on prior questions and answers, the people with knowledge of the Alexa strategy said.

The upgraded Alexa is designed to allow users to seek shopping advice such as which clothes to buy for a vacation and to aggregate news stories, the people said. It is meant to carry out more complicated requests, such as ordering food or drafting emails all from a single prompt.

Amazon hopes the new Alexa will also be a supercharged home automation hub, remembering customer preferences so that, say, morning alarms are set, or the television knows to record favorite shows even when a user forgets to, they said.

The company's plans for Alexa, however, could be delayed or altered if the technology fails to meet certain internal benchmarks, the people said, without giving further details.

Bank of America analyst Justin Post estimated in June that there are roughly 100 million active Alexa users and that about 10% of those might opt for the paid version of Alexa. Assuming the low end of the monthly price range, that would bring in at least $600 million in annual sales.