Amazon’s attempts to generate revenue through its Alexa-enabled devices have reportedly fallen short, resulting in losses exceeding $25 billion from 2017 to 2021, according to the Wall Street Journal. This figure comes from internal documents and insights from unnamed sources familiar with the situation. Although Amazon boasts hundreds of millions of customers using devices like the Echo and Kindle, the primary functions of the Alexa-enabled speakers are often limited to setting alarms and utilizing other free applications, rather than driving sales on Amazon.
A former senior employee expressed concerns about the effectiveness of the company’s investments, noting, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to these challenges, Amazon CEO Andy Jassy is reportedly exploring solutions, including the introduction of a paid tier for the voice assistant. However, some engineers involved in developing this version of Alexa have reservations about its potential impact.
An Amazon spokesperson stated, “We’re focused on the value we create when customers use our services, not just when they buy our devices,” highlighting that the Devices & Services division has established several profitable ventures for the company and is poised for future success.
Moreover, Amazon’s new AI-enhanced version of Alexa, which was showcased in September, is reportedly still far from completion. Former employees have indicated that the company lacks sufficient data and access to the necessary chips to implement the large language model (LLM) that supports the updated assistant. Additionally, Amazon has allegedly shifted its focus from AI-driven Alexa to developing generative AI for its cloud computing division, Amazon Web Services.
In response to these claims, Amazon has countered that its former employees are misinformed about its Alexa AI initiatives, asserting that the Amazon Artificial General Intelligence team has access to both its proprietary Trainium chips and Nvidia GPUs. The company maintains that its objective for Alexa remains unchanged: to create the world’s best personal assistant.