Amazon’s efforts to profit from its Alexa-enabled devices have reportedly resulted in significant financial losses, totaling over $25 billion from 2017 to 2021, according to internal documents and sources cited by the Wall Street Journal. Despite having hundreds of millions of customers, many users primarily utilize Echo speakers for basic functions like setting alarms, rather than for making purchases on Amazon.
A former senior employee expressed concern, stating, “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 exploring solutions, including the potential introduction of a paid tier for the voice assistant. However, engineers working on this version have expressed skepticism about its potential effectiveness.
An Amazon spokesperson emphasized the company’s focus on creating value for customers using its services, not just in device sales. They noted that the Devices & Services division has successfully established several profitable ventures and is well-positioned for continued success.
Additionally, claims have surfaced that the new AI-powered version of Alexa, showcased in September, is far from completion. Former employees indicated that the company lacks sufficient data and essential chips required for operating the advanced language model behind the new assistant. Moreover, Amazon has reportedly shifted its priorities to concentrate on generative AI applications within its cloud computing sector, Amazon Web Services.
In response to these allegations, Amazon stated that former employees hold incorrect and outdated views regarding its Alexa AI initiatives and assured that the Amazon Artificial General Intelligence team has access to crucial in-house chips and Nvidia GPUs. The company’s ambition to develop the world’s best personal assistant for Alexa remains unchanged.