Amazon’s efforts to monetize its Alexa-enabled devices have reportedly resulted in significant financial losses, with the company losing over $25 billion from its Echo, Kindle, and other devices between 2017 and 2021, according to internal documents cited by the Wall Street Journal. Despite having hundreds of millions of customers using these devices, it appears that many users rely on Alexa for basic functions, such as setting alarms, rather than for shopping on Amazon.
A former senior Amazon employee expressed concern over the investments made in personnel and technology, remarking, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these challenges, CEO Andy Jassy is seeking solutions, including the introduction of a paid version of the voice assistant. However, some engineers are skeptical about its potential impact.
An Amazon spokesperson clarified that the company prioritizes the value created for customers when using their services, rather than just the sales of their devices, asserting that the Devices & Services division has established numerous profitable ventures and is poised to continue doing so.
Additionally, Amazon’s newly announced AI-powered version of Alexa, unveiled in September, is reportedly not yet ready for release. Former employees have indicated that the company lacks sufficient data and access to the necessary chips to operate the advanced large language model driving the new assistant. Furthermore, Amazon has shifted its focus towards developing generative AI for its cloud computing platform, Amazon Web Services, rather than prioritizing the new Alexa.
In response to these claims, Amazon stated that the former employees are misinformed and assured that the Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs. The company reaffirmed its commitment to building “the world’s best personal assistant.”