Amazon’s efforts to profit from its Alexa-enabled devices are reportedly faltering, leading to losses exceeding $25 billion from 2017 to 2021, according to the Wall Street Journal. Internal documents and sources familiar with the situation indicate that while Amazon has accumulated hundreds of millions of customers for its devices, most usage revolves around basic functions like setting alarms rather than facilitating purchases on its platform.
A former senior employee expressed concern about the company’s direction, mentioning the significant resources invested in developing what they described as a “smart timer.” In response to the financial challenges, CEO Andy Jassy is seeking solutions and reportedly plans to introduce a paid version of the voice assistant. However, some engineers are skeptical about the potential impact of this new offering.
An Amazon spokesperson stated that the focus is on creating value for customers through services, not just device sales, highlighting that the Devices & Services division has established several profitable ventures.
Additionally, Amazon’s new AI-enhanced version of Alexa, demonstrated in September, is facing challenges. Former employees claim the technology is still in its early stages due to insufficient data and limited access to the necessary hardware for the underlying large language model. The company has also shifted priority towards developing generative AI for its cloud computing sector, Amazon Web Services.
Contrarily, Amazon refuted claims made by former employees, asserting they lack accurate information regarding current AI initiatives for Alexa. The company affirmed that its Artificial General Intelligence team has access to both proprietary Trainium chips and Nvidia GPUs, maintaining its goal of building the best personal assistant available.