Amazon’s efforts to generate revenue through its Alexa-enabled devices have reportedly resulted in significant financial losses for the company, estimated at over $25 billion from 2017 to 2021, as per the Wall Street Journal, which refers to internal documents and anonymous sources. Despite having hundreds of millions of customers using these devices, the Echo speakers, powered by Alexa, are primarily utilized for basic functions like setting alarms and accessing free applications rather than facilitating shopping.
A former senior employee expressed concerns, 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 potential introduction of a paid version of Alexa. However, some engineers within the company doubt that this initiative will yield significant results.
An Amazon spokesperson emphasized the company’s commitment to creating value through its services, not just through device sales, noting that the Devices & Services organization has successfully established several profitable ventures and remains poised for future success.
In addition, Amazon’s newly developed AI-powered version of Alexa, showcased in September, is reportedly far from completion. Former employees claim the company lacks the necessary data and semiconductor resources to support the advanced large language model that would elevate its virtual assistant. Additionally, Amazon has deprioritized this AI project to concentrate on generative AI efforts within its cloud computing division, Amazon Web Services.
In response to these concerns, Amazon asserts that the claims of former employees are incorrect and that its Amazon Artificial General Intelligence team has access to both internal Trainium chips and Nvidia graphics processing units (GPUs). The company’s objective for Alexa continues to be the creation of the world’s best personal assistant.