Amazon’s strategy to profit from its Alexa-enabled devices has not been fruitful, reportedly costing the company over $25 billion from 2017 to 2021, according to internal documents and sources familiar with the matter. Although Amazon boasts hundreds of millions of users for its devices, the Echo speakers are primarily used for setting alarms and utilizing free applications, rather than facilitating purchases.
A former senior employee expressed concern, 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 seeking solutions and is set to introduce a paid version of the voice assistant. However, there are doubts among Amazon’s engineers regarding its potential success.
An Amazon spokesperson emphasized the company’s focus on the value generated from customer engagement rather than just device sales, asserting that the Devices & Services division has created several profitable ventures and is well-positioned for future success.
On another front, reports indicate that Amazon’s new AI-driven Alexa, showcased in September, is far from completing development. Shortages of data and essential chips necessary for the large language model (LLM) have been cited as hurdles. The company is allegedly prioritizing generative AI for its cloud computing branch, Amazon Web Services, over the new Alexa.
Amazon refutes claims made by former employees, asserting that its Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs. The company reiterated its goal to develop “the world’s best personal assistant.”