Amazon’s efforts to generate revenue from its Alexa-enabled devices have reportedly led to significant financial losses, amounting to over $25 billion between 2017 and 2021. Internal documents and sources familiar with the company indicate that despite having hundreds of millions of customers, most use Alexa for basic functions like setting alarms rather than for shopping.
A former senior Amazon employee expressed concern, saying, “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 exploring solutions and is said to be introducing a paid tier for Alexa. However, some engineers involved in this initiative are skeptical about its potential impact.
An Amazon representative stated that the company focuses on the overall value created through its services, not solely on device sales. They emphasized that Amazon has developed several profitable endeavors within its Devices & Services division and is optimistic about future growth.
Additionally, Amazon’s new AI-enhanced Alexa, showcased in September, is reportedly not on track, as former employees claim the company lacks sufficient data and access to necessary hardware for the advanced language model it aims to implement. The company is prioritizing generative AI development for its cloud division, Amazon Web Services, over enhancing the AI capabilities of Alexa.
In response to these claims, Amazon contended that the assertions from past employees are inaccurate and suggested that its Artificial General Intelligence team has adequate resources, including proprietary chips and Nvidia GPUs, to pursue its goal of creating the best personal assistant.