Amazon’s initiative to generate revenue through its Alexa-enabled devices has reportedly resulted in significant financial losses, amounting to over $25 billion between 2017 and 2021. Internal documents and sources familiar with the situation indicate that, despite attracting hundreds of millions of customers, many users primarily utilize Alexa-enabled Echo devices for basic functions like setting alarms, rather than shopping on Amazon.
A former senior Amazon employee expressed concerns about the company’s workforce increase, 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, there are doubts among some engineers regarding the effectiveness of this approach.
An Amazon spokesperson emphasized that the company values the service provided to customers beyond just device sales, noting that their Devices & Services division has created several profitable ventures and is poised to continue doing so.
Additionally, a recently showcased AI-enhanced version of Alexa may still be far from completion, with former employees citing insufficient data and limited access to necessary hardware for the large language model behind the upgrade. Reports suggest that Amazon has shifted focus towards developing generative AI for its Amazon Web Services division instead of advancing the AI-powered Alexa.
In response to criticisms, Amazon asserts that its former employees might be misinformed about the current state of its AI developments, claiming that the Amazon Artificial General Intelligence team has access to the required technology to achieve their goal of creating the world’s best personal assistant.