Amazon’s efforts to generate profit from its Alexa-enabled devices have reportedly led to significant losses for the company, with estimates suggesting losses exceeding $25 billion from 2017 to 2021, according to internal documents cited by the Wall Street Journal. Although Amazon boasts hundreds of millions of customers for its devices, the majority of usage for its Echo speakers appears to focus on basic functions like setting alarms, rather than making purchases from Amazon.
A former senior employee expressed concerns about the massive investment in staffing and resources, remarking, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In light of these challenges, Amazon’s CEO Andy Jassy is seeking solutions, including the introduction of a paid tier for its voice assistant. However, reports indicate that some engineers involved in this initiative are skeptical about its potential impact.
An Amazon spokesperson acknowledged the situation, stating, “We’re focused on the value we create when customers use our services, not just when they buy our devices,” and noted that the Devices & Services organization has established several profitable ventures and is positioned to continue this trend.
Additionally, Amazon’s new AI-enhanced version of Alexa, showcased in September, reportedly faces delays due to insufficient data and inadequacies in the processing chips required for the large language model that powers it. Former employees suggest that the project’s development has been deprioritized to allow resources to focus on generative AI efforts within Amazon Web Services.
In response to the concerns raised by former employees, Amazon maintains that its current initiatives regarding Alexa’s artificial intelligence are on track, asserting that the Amazon Artificial General Intelligence team has the necessary access to both their in-house Trainium chips and Nvidia GPUs, and reiterating its goal to build the world’s best personal assistant.