Amazon’s efforts to generate revenue from its Alexa-enabled devices have reportedly resulted in significant losses, amounting to over $25 billion between 2017 and 2021, according to internal documents and sources cited by the Wall Street Journal. While the company boasts hundreds of millions of customers for its Echo, Kindle, and other devices, many users primarily utilize Alexa for basic functions like setting alarms and utilizing free apps, rather than making purchases through Amazon.
A former senior employee expressed concerns over the situation, 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 introduction of a paid version of its voice assistant. Nevertheless, some engineers working on the new paid version have reservations about its potential effectiveness.
An Amazon spokesperson emphasized that the company prioritizes the value created for customers when using their services, rather than just the sales of their devices. The spokesperson also noted that the Devices & Services division has established several profitable ventures for Amazon and is well-positioned to continue this trend.
On another front, Amazon’s new AI-enhanced Alexa, showcased in September, is reportedly not near completion. Former employees indicated that the company lacks sufficient data and access to the necessary hardware to support the large language model (LLM) that would power this version. Furthermore, Amazon has allegedly shifted its focus to generative AI for its cloud computing division, Amazon Web Services.
In response to these claims, Amazon has asserted that its former employees are misinformed about its current efforts related to Alexa’s AI. The company stated that its Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs, reaffirming its commitment to developing the world’s best personal assistant.