Amazon’s efforts to generate revenue from its Alexa-enabled devices have reportedly resulted in significant financial losses, amounting to over $25 billion from 2017 to 2021, according to a report by the Wall Street Journal, which referenced internal documents and sources familiar with the situation. Despite having hundreds of millions of customers for its devices, many users primarily utilize the Alexa-enabled Echo speakers for basic functions such as setting alarms rather than for shopping on Amazon.
A former senior employee expressed concerns about the effectiveness of the investments, 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 the voice assistant. However, some engineers involved in the development of this new paid Alexa version reportedly doubt its potential impact.
An Amazon spokesperson emphasized the company’s commitment to creating value beyond device sales, highlighting the establishment of multiple profitable ventures within its Devices & Services organization.
In the meantime, Amazon’s latest AI-driven Alexa, unveiled in September, is said to be far from ready, with former employees indicating that the company lacks sufficient data and access to the necessary technology to support the new large language model. Furthermore, Amazon has shifted its focus toward enhancing generative AI capabilities for its cloud computing service, Amazon Web Services.
Amazon has contested the claims from former employees, asserting that the Amazon Artificial General Intelligence team has access to both proprietary Trainium chips and Nvidia GPUs, maintaining its goal to develop “the world’s best personal assistant.”