Amazon’s strategy to generate revenue from its Alexa-enabled devices has 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. Although the retail giant boasts hundreds of millions of users for its devices, its Echo speakers are primarily used for basic functions like setting alarms and utilizing free applications, rather than making purchases through Amazon.
A former senior Amazon employee expressed concern, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these financial challenges, CEO Andy Jassy is exploring solutions, including the introduction of a paid version of the voice assistant. However, some engineers within the company question whether this new tier will effectively address the current issues.
In a statement, an Amazon representative emphasized that the company focuses on the overall value created for customers beyond device sales, claiming that its Devices & Services division has successfully established multiple profitable businesses.
On another front, Amazon’s newly designed AI-powered Alexa, which was showcased in September, is reportedly not yet ready for deployment. Former employees have noted that the company faces challenges related to data availability and the necessary hardware for running the advanced language model required for the updated assistant. Additionally, Amazon has shifted priorities to concentrate on developing generative AI for its cloud computing platform, Amazon Web Services.
Amazon responded to the criticisms from former employees by asserting that their views are inaccurate regarding the company’s AI initiatives, stating that the Amazon Artificial General Intelligence team has access to essential resources, including both in-house Trainium chips and Nvidia GPUs. The company reiterated its commitment to creating the best personal assistant in the market.