Amazon’s strategy to generate revenue through its Alexa-enabled devices has not been successful, leading to substantial financial losses for the company, reportedly amounting to over $25 billion from 2017 to 2021. According to internal documents and sources familiar with the situation, while Amazon boasts hundreds of millions of customers for its devices, the Alexa-enabled Echo speakers are primarily utilized for basic functions like setting alarms rather than for shopping on Amazon.
Concerns have been raised by former Amazon employees, who expressed doubts about the effectiveness of the company’s investment, with one 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 its voice assistant. However, some engineers involved in developing this version of Alexa have voiced skepticism about its potential impact.
An Amazon spokesperson emphasized that the company is concentrating on the value created through customer interactions, rather than solely on device sales. They claimed that Amazon’s Devices & Services division has successfully launched multiple profitable businesses and is well-equipped for future success.
Additionally, reports indicate that Amazon’s newly introduced AI-powered version of Alexa is facing significant hurdles and may not be ready for deployment, as the company lacks sufficient data and access to the necessary chips for the large language model required for this advanced assistant. Furthermore, it appears that Amazon has shifted its focus towards enhancing generative AI capabilities for its cloud computing sector, Amazon Web Services.
In response to these criticisms, Amazon refuted claims from former employees, asserting that the current efforts related to Alexa’s AI development are on track. The company stated that its Artificial General Intelligence team has access to both proprietary Trainium chips and Nvidia GPUs, and reiterated its commitment to creating the best personal assistant in the world.