Amazon’s efforts to monetize its Alexa-enabled devices have reportedly resulted in significant financial losses, amounting to over $25 billion between 2017 and 2021, as indicated by internal documents and insights from unnamed sources, according to the Wall Street Journal. Despite Amazon’s vast customer base for its devices, the Echo speakers are primarily utilized for functions like setting alarms and other free applications, rather than for making purchases on the Amazon platform.
A former senior Amazon employee expressed concerns about the company’s hiring spree, 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. However, some engineers working on this project are skeptical about its potential success, as reported by the Wall Street Journal.
An Amazon spokesperson emphasized the company’s focus on the value derived from their services beyond just device sales, highlighting that its Devices & Services division has created numerous profitable ventures and is positioned for future growth.
On another front, Amazon’s new AI-powered version of Alexa, showcased in September, is reportedly not yet ready for deployment, based on former employees’ statements. They noted a lack of sufficient data and access to necessary chips that support the large language model for this upgraded assistant. Furthermore, Amazon has shifted priorities towards generative AI developments for its cloud service, Amazon Web Services.
In response to these claims, Amazon has stated that the assessments made by former employees are incorrect and that its Artificial General Intelligence team has adequate access to both in-house Trainium chips and Nvidia GPUs. The company reaffirms its commitment to developing “the world’s best personal assistant” in its ongoing initiatives for Alexa.