Amazon’s initiative to profit from its Alexa-enabled devices has reportedly been detrimental, resulting in losses amounting to over $25 billion from 2017 to 2021 across its Echo, Kindle, and other products. This information comes from the Wall Street Journal, which cites internal documents and unnamed sources familiar with the situation. Despite having hundreds of millions of customers, Amazon’s Echo speakers are mainly utilized for basic functions like setting alarms rather than for making purchases on Amazon.
A former senior employee expressed concerns about the company’s hiring and development efforts, noting the significant resources invested in creating a device that primarily functions as a smart timer. In response, Amazon’s CEO Andy Jassy is seeking solutions, including the introduction of a paid version of the voice assistant. However, some engineers working on the project are skeptical about its potential impact.
An Amazon spokesperson emphasized the company’s commitment to delivering value through its services, stating that the Devices & Services organization has created several profitable ventures and is poised for future success.
In addition, Amazon’s new AI-powered version of Alexa, which was showcased in September, is reportedly far from ready. Former employees indicate that the company lacks sufficient data and the necessary chips to operate the advanced language model associated with the new assistant. Amazon has shifted its focus towards developing generative AI for its cloud computing division, Amazon Web Services, leading to a deprioritization of the AI-enhanced Alexa project.
In response to these concerns, Amazon asserts that its former employees are misinformed regarding the capabilities of its Alexa AI initiatives. The company claims that its Artificial General Intelligence team has access to both its proprietary Trainium chips and Nvidia GPUs, and intends to continue refining Alexa to achieve its goal of being the world’s top personal assistant.