Amazon’s strategy regarding its Alexa-enabled devices has reportedly resulted in significant losses, estimated at over $25 billion between 2017 and 2021, according to internal documents and sources familiar with the matter. Despite having hundreds of millions of customers, many users seem to favor the Echo speakers for basic tasks like setting alarms rather than making purchases through Amazon.
A former senior employee expressed concerns about the situation, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In light of these challenges, CEO Andy Jassy is seeking solutions, including the introduction of a paid tier for the Alexa voice assistant. However, there are doubts among some engineers about the potential impact of this paid version.
An Amazon spokesperson emphasized the company’s focus on creating value through its services, not just through device sales, asserting that its Devices & Services organization has achieved profitability and continues to be well-positioned for future success.
Additionally, the new AI-powered Alexa that Amazon showcased in September is reportedly not ready for deployment, as former employees indicated shortages in data and necessary chips to support the advanced language model that would enhance the assistant’s capabilities. The company has allegedly shifted its priorities to develop generative AI for its cloud services, Amazon Web Services.
In response to these reports, Amazon stated that former employees might not be fully informed about current initiatives, asserting that its Artificial General Intelligence team has access to the required Trainium chips and Nvidia GPUs, with the enduring goal of developing the world’s best personal assistant.