Amazon’s ambitions to profit from its Alexa-enabled devices have reportedly not materialized, leading to significant financial losses for the company, totaling over $25 billion between 2017 and 2021, according to the Wall Street Journal. Internal documents and unnamed sources indicate that despite having hundreds of millions of customers, the primary use of devices like the Echo and Kindle often revolves around basic functions such as setting alarms, rather than driving purchases on Amazon.
A former high-ranking Amazon official expressed concern, suggesting that the hiring of thousands of employees has resulted in little more than a “smart timer” functionality. In response to these challenges, Amazon CEO Andy Jassy is reportedly exploring a paid subscription model for Alexa. However, some engineers working on this new service fear it may yield minimal impact.
An Amazon spokesperson emphasized their commitment to creating value through customer experiences, stating, “Our Devices & Services organization has established numerous profitable businesses for Amazon and is well-positioned to continue doing so.”
Meanwhile, Amazon’s new AI-enhanced version of Alexa, showcased in September, faces its own hurdles. Former employees claim it is far from ready due to insufficient data and a lack of access to necessary chips for the large language model it relies on. Reports suggest that Amazon has shifted its focus toward generative AI development for its cloud computing division, Amazon Web Services.
In response to concerns from former staff, Amazon contended that they are misinformed about the capabilities of its AI initiatives and maintain that the Amazon Artificial General Intelligence team is equipped with the relevant Trainium chips and Nvidia GPUs. The company reiterated its goal of developing “the world’s best personal assistant.”