Neil Cybart 9/3/24 Neil Cybart 9/3/24

Amazon Alexa to Be Powered by Claude, Charging for AI, Apple Rumored to Invest in OpenAI

Happy Tuesday. Welcome to September.

One very quick follow-up to last Thursday’s discussion involving Apple Watch. We talked about my wish for Google to be more original with smartwatches. It’s easy to be different. A much harder goal is to be better.

Today’s update will have an AI theme as we begin with Amazon, move over to AI monetization, and then conclude with Apple / OpenAI. Let’s jump in.

Amazon Alexa to Be Powered by Claude

Here’s Reuters:

“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 told Reuters.

Amazon plans to charge $5 to $10 a month for its new ‘Remarkable’ version of Alexa as it will use powerful generative AI to answer complex queries, while still offering the ‘Classic’ voice assistant for free, Reuters reported in June.

But initial versions of the new Alexa using in-house software simply 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.”

Last October, Amazon announced a $4B investment in Anthropic (owns Claude). The news was positioned by Amazon as a “strategic collaboration to advance generative AI.” Anthropic said it would use AWS as its primary cloud provider, which means a portion of that $4B will find its way back to Amazon, while making future foundation models accessible to AWS customers with some features coming to AWS first. It’s not clear if this rumored Alexa/Claude integration was in the works last year and was tied with Amazon’s $4B investment.

As for motives, Amazon is becoming nervous of missing the boat on whatever remaining generative AI buzz and mania is left to squeeze. A year ago, Amazon held a product event where it gave its take on generative AI. As we discussed at the time,

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Neil Cybart 7/9/24 Neil Cybart 7/9/24

Apple Given Observer Board Seat at OpenAI, A Phil Schiller Renaissance

We begin with my thoughts on Apple being given an observer board seat at OpenAI. The discussion then turns to Apple’s Phil Schiller, who reportedly will fill Apple’s seat on OpenAI’s board. In some ways, this new stage for Schiller comes across as something of a renaissance.

Hello everyone. Happy Monday.

Let's jump right into some news that came out last week.

Apple Given Observer Board Seat at OpenAI

Over at Bloomberg, here’s Mark Gurman:

“Apple Inc. will get an observer role on OpenAI’s board as part of a landmark agreement announced last month, further tightening ties between the once-unlikely partners.

Phil Schiller, the head of Apple’s App Store and its former marketing chief, was chosen for the position, according to people familiar with the situation. As a board observer, he won’t be serving as a full-fledged director, said the people, who asked not to be identified because the matter isn’t public.

The move follows Apple’s announcement in June that it would offer ChatGPT in the iPhone, iPad and Mac as part of a suite of artificial intelligence features. The board arrangement will take effect later this year, and Schiller hasn’t yet attended any meetings, according to the people.”

The news was later confirmed by other publications including the Financial Times.

Talk about a turn of events. Late last year, OpenAI went through one of the crazier stretches in Silicon Valley history as a board coup was attempted to kick Sam Altman out of the company. While the coup initially appeared to be going according to plan, Altman initiated one of the more masterful examples of leveraging social media and the press to win back control of the narrative. This eventually led to something of an OpenAI employee revolt that came across as more of a negotiation tactic. The Inside Orchard essay "Sam Altman Mania" went over my thoughts on how all of that went down. The end result was Altman regaining power at OpenAI while his primary detractors eventually left the company. The path for OpenAI to become a for-profit entity has never been more open.

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