Amazon’s initiative to generate revenue through its Alexa-enabled devices has reportedly resulted in significant financial losses, totaling more than $25 billion from 2017 to 2021. This information comes from internal documents and insiders cited by the Wall Street Journal. Although Amazon has amassed a vast customer base for its devices, users primarily utilize the Alexa-enabled Echo speakers for basic functions like setting alarms, rather than for making purchases.
A former senior Amazon employee expressed concern about the company’s hiring spree, noting that despite bringing on 10,000 new staff, the innovation has led to the creation of a “smart timer” rather than profitable products.
In response to these challenges, CEO Andy Jassy is reportedly exploring solutions, including the introduction of a paid version of Alexa. However, some engineers are skeptical about the potential impact of this initiative.
An Amazon spokesperson emphasized the company’s commitment to delivering value beyond device sales, highlighting the profitability of various sectors within its Devices & Services organization.
Meanwhile, the development of a new AI-enhanced version of Alexa, showcased in September, is said to be lagging according to former employees. They claim the company lacks sufficient data and the necessary chips to support the new large language model driving the updated assistant. Additionally, it appears that Amazon has shifted its focus towards developing generative AI capabilities for its cloud computing division, Amazon Web Services, rather than prioritizing the new AI version of Alexa.
In response to these claims, Amazon has rejected the assertions made by former employees, stating that they are misinformed about the current state of Alexa’s AI development. The company insists that its Artificial General Intelligence team has access to both proprietary chips and NVIDIA GPUs, reaffirming its commitment to creating a leading personal assistant.