Amazon’s strategy to generate revenue through its Alexa-enabled devices appears to have backfired, resulting in losses of over $25 billion between 2017 and 2021. This information comes from internal documents and sources quoted by the Wall Street Journal. Despite boasting hundreds of millions of customers, many users reportedly utilize the Alexa-enabled Echo speakers mainly for basic functions like setting alarms rather than for shopping on Amazon.
A former senior Amazon employee expressed concerns about the effectiveness of the investments made, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to the financial setbacks, Amazon CEO Andy Jassy is exploring solutions, including the launch of a paid version of the voice assistant Alexa. However, some engineers involved in the project are skeptical about its potential impact.
An Amazon spokesperson emphasized the company’s focus on delivering value through its services rather than simply selling devices. They assured that their Devices & Services division has successfully developed profitable businesses and is poised for continued success.
In addition, Amazon’s newly developed AI-enhanced Alexa, which was showcased in September, is reportedly not fully prepared for deployment. Former employees allege that the company lacks sufficient data and access to the necessary technology to support the new large language model (LLM). Instead, Amazon has shifted its priorities towards advancing generative AI within its cloud computing branch, Amazon Web Services.
Amazon has refuted the claims made by its former employees, asserting that they are misinformed about the current progress of Alexa’s AI capabilities and that the company possesses the required infrastructure, including both in-house Trainium chips and Nvidia GPUs. The firm stated that its objective for Alexa remains unchanged — to create the world’s best personal assistant.