Amazon’s efforts to generate revenue from its Alexa-enabled devices have reportedly resulted in significant financial losses, amounting to over $25 billion between 2017 and 2021. According to internal documents and insights from unnamed sources cited by the Wall Street Journal, while Amazon has attracted hundreds of millions of customers for its devices, the Echo speakers are primarily utilized for basic functions like setting alarms rather than for making purchases.
A former senior Amazon employee expressed concerns about the situation, saying, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In light of these challenges, Amazon CEO Andy Jassy is reportedly considering a solution by introducing a paid tier for the voice assistant. However, some engineers involved in the development of this paid version are skeptical about its potential to change the current dynamics.
An Amazon spokesperson emphasized that the company prioritizes the value created for customers when using its services, not merely during device purchases. They highlighted that the Devices & Services division has established several profitable avenues for Amazon and is positioned for continued success.
On another front, the new AI-powered version of Alexa, which Amazon showcased in September, is said to be far from completion, with former employees noting a lack of necessary data and chip resources to operate the large language model. Furthermore, it is reported that Amazon has shifted its focus towards enhancing generative AI for its cloud computing service, Amazon Web Services, sidelining the development of the new Alexa.
In response to these claims, Amazon stated that its former employees are misinformed about the current status of its Alexa AI initiatives and clarified that the Amazon Artificial General Intelligence team has access to essential in-house chips and Nvidia GPUs. The company reiterated its goal to develop “the world’s best personal assistant.”