Amazon’s efforts to profit from its Alexa-enabled devices have reportedly resulted in substantial losses, totaling over $25 billion from 2017 to 2021, according to a report by the Wall Street Journal that references internal documents and anonymous sources. Despite having hundreds of millions of customers, Alexa-enabled Echo speakers are primarily used for functions like setting alarms rather than for purchasing products through Amazon.
A former senior employee expressed concerns about the company’s direction, 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 reportedly exploring a subscription model for its voice assistant. However, some engineers involved in developing this paid version are skeptical about its potential impact.
An Amazon spokesperson emphasized the company’s focus on the value created through its services rather than solely through device sales. They pointed out that the Devices & Services division has developed several profitable businesses that position the company favorably moving forward.
Meanwhile, the new AI-powered version of Alexa, showcased in September, is allegedly not ready for deployment, according to former employees. Reports suggest that Amazon lacks sufficient data and necessary chips to operate the large language model that powers the updated assistant. Furthermore, the company has reportedly shifted its focus away from the AI-enhanced Alexa to prioritize generative AI initiatives within its cloud computing arm, Amazon Web Services.
Amazon has countered these claims, asserting that its former employees lack accurate information regarding its current Alexa AI projects and highlighted that the Amazon Artificial General Intelligence team has access to essential in-house chips and Nvidia graphics processing units. The company’s commitment remains to develop “the world’s best personal assistant.”