Amazon’s efforts to generate profit through its Alexa-enabled devices have reportedly resulted in significant financial losses, totaling over $25 billion from 2017 to 2021. Internal documents and sources familiar with the situation cited by the Wall Street Journal indicate that while Amazon boasts hundreds of millions of device users, the Echo speakers are primarily utilized for basic functions like setting alarms rather than driving sales on Amazon.
A former Amazon executive expressed concern about the utility of the workforce investment, 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, with plans to introduce a paid version of the Alexa voice assistant. However, some engineers involved in the project are skeptical about its potential impact.
An Amazon spokesperson emphasized the company’s commitment to creating value for customers beyond device sales, highlighting the profitability of various business sectors within its Devices & Services organization.
In addition, concerns have emerged regarding the readiness of Amazon’s new AI-powered Alexa, which was showcased in September. Former employees suggest that there is insufficient data and lack of access to the necessary technology to support the large language model behind the upgraded assistant. Reports indicate that Amazon may be prioritizing its generative AI advancements for its cloud computing division, Amazon Web Services.
In response to these claims, Amazon defended its position, stating that its former employees are misinformed. The company assured that the Amazon Artificial General Intelligence team has access to both proprietary Trainium chips and Nvidia GPUs, reaffirming its goal to develop the world’s leading personal assistant.