Amazon’s efforts to monetize its Alexa-enabled devices have reportedly resulted in significant financial losses, totaling over $25 billion from 2017 to 2021, according to information sourced from internal documents and unnamed insiders reviewed by the Wall Street Journal. Despite boasting hundreds of millions of users for its devices, it appears that Amazon’s Echo speakers are more frequently used for basic functions like setting alarms rather than for shopping on the platform.
A former senior employee expressed concerns over the company’s investment, 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 and is reportedly working on introducing a paid version of its voice assistant. However, there are concerns among some engineers about its potential effectiveness.
An Amazon spokesperson commented, “We’re focused on the value we create when customers use our services, not just when they buy our devices.” They emphasized that the Devices & Services division has developed various profitable ventures and is positioned for future success.
In addition, Amazon’s latest AI-powered version of Alexa, which was demonstrated in September, appears to be behind schedule, according to former employees. They noted that the company lacks sufficient data and necessary chips for operating the large language model that drives the new assistant. Furthermore, Amazon has reportedly shifted its focus away from the AI-enhanced Alexa to prioritize the development of generative AI for its cloud computing division, Amazon Web Services.
Amazon has disputed claims made by former employees, asserting that they are misinformed about the current progress of Alexa’s AI initiatives. The company confirmed that its Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs, with the goal of constructing “the world’s best personal assistant.”