Amazon’s initiative to generate revenue through its Alexa-enabled devices has reportedly led to significant financial losses, amounting to over $25 billion from 2017 to 2021. Internal documents and insider accounts cited by the Wall Street Journal reveal that despite having hundreds of millions of users, the primary functions of Alexa-driven Echo speakers often revolve around setting alarms and utilizing free applications rather than making purchases on Amazon.
A former senior employee expressed concerns about the company’s direction, 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 exploring solutions, including the introduction of a subscription-based version of Alexa. However, some engineers within the company have voiced skepticism about the potential impact of this paid version.
An Amazon spokesperson emphasized the company’s focus on the overall value created for customers, asserting that the Devices & Services division has cultivated numerous profitable ventures and remains positioned for future growth.
In addition, Amazon’s anticipated AI-enhanced version of Alexa, showcased in September, is reportedly far from ready, as former employees indicate the company lacks sufficient data and access to the necessary chips for its large language model. Furthermore, Amazon has allegedly shifted its priorities toward developing generative AI for its cloud computing branch, Amazon Web Services, rather than fully advancing the AI capabilities of Alexa.
Despite this, Amazon disputes the claims of its former employees, asserting that the Amazon Artificial General Intelligence team has access to both internal Trainium chips and Nvidia GPUs, and maintains its commitment to building “the world’s best personal assistant.”