Amazon’s efforts to profit 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 sources cited by the Wall Street Journal. Despite having hundreds of millions of customers using devices like the Echo and Kindle, it appears that the Alexa-enabled Echo speakers are primarily utilized for non-shopping functions, such as setting alarms and using free apps.
A former senior employee highlighted concerns within the company, saying, “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 its voice assistant. However, some engineers have expressed doubts about the effectiveness of this initiative.
An Amazon representative stated that the company is prioritizing the value generated through its services rather than solely focusing on device sales. They emphasized that the Devices & Services division has established profitable ventures for the company and is positioned for continued success.
In addition, Amazon recently showcased a new AI-powered iteration of Alexa. However, former employees indicate that this upgrade is far from completion, citing issues with insufficient data and the lack of necessary chips for running the large language model associated with the virtual assistant. Furthermore, it was reported that Amazon is prioritizing generative AI development for its Amazon Web Services over the enhancement of Alexa.
Amazon countered these claims, asserting that its former employees are misinformed and noting that its Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs. The company reiterated its commitment to creating the best personal assistant in the world.