Amazon’s efforts to generate revenue from its Alexa-enabled devices have reportedly resulted in significant financial losses, amounting to over $25 billion between 2017 and 2021, according to internal documents reviewed by the Wall Street Journal. Despite having hundreds of millions of customers, the primary usage of Amazon’s Echo speakers appears to be for basic functions like setting alarms and utilizing free applications rather than shopping on Amazon.
A former senior employee expressed concerns about the situation, noting the company’s extensive investment in hiring and the development of a smart timer instead of a more profitable product. In response, Amazon’s CEO Andy Jassy is reportedly exploring solutions, including the introduction of a paid tier for the voice assistant. However, engineers working on this new version of Alexa have voiced doubts about its potential effectiveness.
An Amazon spokesperson emphasized the company’s focus on the value generated through its services, stating that the Devices & Services organization has successfully established multiple profitable ventures and is poised to continue this trend.
In addition, Amazon’s upgraded AI-powered Alexa, which was showcased in September, is reportedly facing challenges. Former employees indicate that the company lacks sufficient data and the necessary chips to support the advanced large language model that would enhance the assistant’s capabilities. Furthermore, Amazon is prioritizing the development of generative AI for its cloud computing sector, Amazon Web Services, over the new Alexa model.
In response to these claims, Amazon contends that the assertions from former employees are inaccurate. The company maintains that its Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs, reaffirming its commitment to building the world’s best personal assistant.