Amazon’s attempt to monetize its Alexa-enabled devices has reportedly not been fruitful, with losses totaling over $25 billion from 2017 to 2021, according to internal documents and sources cited by the Wall Street Journal. Despite having hundreds of millions of customers, many users mainly employ Echo speakers for basic tasks like setting alarms rather than shopping.
A former senior employee expressed concerns about Amazon’s hiring practices and the actual functionality of the devices, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to these challenges, CEO Andy Jassy is exploring solutions, including the introduction of a paid tier for Alexa. However, engineers working on this initiative have expressed skepticism about its potential impact.
An Amazon spokesperson emphasized the company’s focus on delivering value through their services beyond just device sales, noting that the Devices & Services division has created several profitable ventures and is poised for future success.
On the development front, Amazon’s newly announced AI-powered Alexa, showcased in September, is reportedly far from completion. Former employees mentioned that the company lacks sufficient data and access to the necessary chips for the large language model behind the update. Instead, Amazon has shifted its focus towards generative AI developments for its cloud computing division, Amazon Web Services.
In response to these claims, Amazon refuted the assertions of former staff, asserting that they are misinformed about the current state of Alexa’s AI advancements. The company maintains that its Artificial General Intelligence team has access to both their proprietary Trainium chips and Nvidia GPUs, and remains committed to creating the “world’s best personal assistant.”