Amazon’s efforts to generate revenue from its Alexa-enabled devices have reportedly resulted in significant financial losses for the company, totaling over $25 billion from 2017 to 2021, as indicated by internal documents and sources familiar with the situation. Despite having hundreds of millions of customers using devices such as Echo and Kindle, it appears that many users primarily utilize these products for basic functions like setting alarms and accessing free applications, rather than for shopping on Amazon.
A former senior employee highlighted concerns about the efficiency of the investments made, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these challenges, Amazon CEO Andy Jassy is seeking solutions, including the introduction of a paid tier for Alexa. However, some engineers involved in the development of this paid version reportedly have doubts about its potential impact.
An Amazon spokesperson emphasized the company’s focus on delivering value through its services, asserting that the Devices & Services organization has established several profitable ventures and is equipped to continue this trend.
In addition, the anticipated AI-enhanced version of Alexa, showcased in September, is reportedly facing delays. Former employees noted that the necessary data and technology to implement the new large language model (LLM) are not adequately available, as Amazon appears to be prioritizing generative AI developments for its cloud computing division, Amazon Web Services.
Amazon has disputed the claims made by former employees, asserting that the Alexa AI team has access to the required computing resources for their initiatives, including proprietary Trainium chips and Nvidia GPUs. The company reaffirms its commitment to developing what it aims to be the world’s leading personal assistant.