Amazon’s efforts to generate revenue from its Alexa-enabled devices have reportedly resulted in significant financial losses, amounting to over $25 billion from 2017 to 2021. This information comes from internal documents and sources familiar with the matter, as reported by the Wall Street Journal. Despite boasting hundreds of millions of customers for its devices, the use of Alexa-enabled Echo speakers primarily revolves around setting alarms and utilizing free applications, rather than facilitating purchases on Amazon.
A former senior employee commented on the situation, expressing concerns about the company’s hiring practices and the actual functionality of their devices. In light of these challenges, CEO Andy Jassy is seeking solutions, which may include a new paid tier for the voice assistant. Nevertheless, some engineers involved in this initiative have doubts about its potential effectiveness.
An Amazon spokesperson stated that the company prioritizes the value provided through their services, not merely the sales of devices. They emphasized that the Devices & Services division has successfully established numerous profitable ventures and remains optimistic about future prospects.
In addition, Amazon’s new AI-driven version of Alexa, showcased in September, is reportedly still in development and lacking sufficient data and necessary technology to support its large language model functionality. The company has allegedly shifted its focus toward enhancing generative AI for its cloud computing segment, Amazon Web Services.
Amazon, however, has responded to criticisms from former employees, claiming they are misinformed about the current state of Alexa’s AI initiatives. The company asserts that its Amazon Artificial General Intelligence team has access to the required technology, including proprietary Trainium chips and Nvidia GPUs, and reaffirms its commitment to creating an exceptional personal assistant.