Amazon’s efforts to profit from its Alexa-enabled devices have led to significant losses, amounting to over $25 billion from 2017 to 2021, according to internal documents and sources familiar with the matter, as reported by the Wall Street Journal. While the tech giant boasts hundreds of millions of customers for devices like the Echo and Kindle, it appears that users primarily utilize Alexa-enabled speakers for basic functions such as setting alarms, rather than shopping through Amazon.
A former senior Amazon 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’s CEO Andy Jassy is reportedly seeking solutions, including the introduction of a paid version of its voice assistant. However, some engineers involved in this project have reservations about its potential impact.
An Amazon spokesperson emphasized the company’s commitment to creating value through its services, rather than solely focusing on device sales. They noted that the Devices & Services division has successfully established numerous profitable ventures and aims to continue this trend.
Additionally, reports suggest that Amazon’s new AI-powered Alexa, which was showcased in September, is still not ready for deployment. Former employees indicate that the company lacks sufficient data and necessary hardware, such as chips, to fully support the advanced language model for this upgraded version. It has been suggested that the company has shifted focus to generative AI initiatives within its cloud computing branch, Amazon Web Services.
In response, Amazon refuted claims from former employees, asserting that the Amazon Artificial General Intelligence team has access to the required Trainium chips and Nvidia GPUs. The company maintains that its goal remains unchanged: to develop the world’s leading personal assistant.