Amazon’s efforts to profit from its Alexa-enabled devices have not been successful, resulting in losses amounting to over $25 billion from 2017 to 2021, according to a report from the Wall Street Journal that references internal documents and unnamed sources. Despite Amazon’s extensive customer base for its devices, the Echo speakers are reportedly more often used for basic tasks like setting alarms rather than for making purchases.
A former senior employee expressed concerns about the company’s overinvestment, saying, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response, CEO Andy Jassy is seeking solutions and plans to introduce a paid version of the voice assistant. However, some engineers involved in the project are skeptical about its potential effectiveness.
An Amazon spokesperson stated, “We focus on the value we create when customers use our services, not just when they buy our devices,” adding that the company’s Devices & Services division has successfully established profitable ventures and is poised for future success.
In addition, reports indicate that the new AI-powered version of Alexa, demonstrated in September, is still far from completion. Former employees claim that Amazon lacks sufficient data and the necessary chips for the large language model that drives this update. The company has also shifted priorities to concentrate on developing generative AI for its cloud computing service, Amazon Web Services.
Amazon has countered claims from former employees, insisting that they are misinformed regarding the progress of its Alexa AI initiatives. The company asserts that its Artificial General Intelligence team has access to both its proprietary Trainium chips and Nvidia GPUs, maintaining its goal to create the best personal assistant available.