Amazon’s efforts to generate revenue through its Alexa-enabled devices have reportedly resulted in significant financial losses, totaling over $25 billion from 2017 to 2021, according to internal documents and sources familiar with the matter, as cited by the Wall Street Journal. Despite having hundreds of millions of customers, users mainly utilize Alexa-enabled Echo speakers for simple tasks such as setting alarms rather than making purchases on the Amazon platform.
A former senior employee at Amazon expressed concern about the company’s investments, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In light of these challenges, CEO Andy Jassy is seeking solutions and is reportedly set to introduce a paid tier for the Alexa voice assistant. However, there are concerns among engineers working on this paid version that it may not significantly alter the current situation.
An Amazon spokesperson emphasized the company’s focus on the value created through service usage rather than merely device sales. They indicated that the Devices & Services division has successfully established various profitable ventures and is geared towards continued success.
Furthermore, Amazon recently unveiled an AI-powered version of Alexa, but former employees have indicated that it is far from ready for launch. They pointed out that the company lacks sufficient data and the necessary chips to support the large language model driving the new assistant. Additionally, there are reports that Amazon has shifted its priorities toward generative AI development for its cloud computing segment, Amazon Web Services.
In response to these claims, Amazon refuted the comments from former employees, asserting that their current AI initiatives are well-supported with access to in-house Trainium chips and Nvidia GPUs. The company’s commitment to developing “the world’s best personal assistant” remains unchanged.