Amazon’s efforts to generate profit through its Alexa-enabled devices have reportedly resulted in significant financial losses, amounting to over $25 billion from 2017 to 2021. According to internal documents and sources cited by the Wall Street Journal, the online retail giant’s Echo, Kindle, and other devices have not performed as well as expected, with many users preferring to use the Alexa-enabled Echo speakers for basic functions like setting alarms instead of shopping on Amazon.
A former senior Amazon employee expressed concerns, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to the financial setback, Amazon CEO Andy Jassy is reportedly exploring solutions, including the introduction of a paid version of its voice assistant. However, some engineers working on this paid version are skeptical about its potential impact.
An Amazon spokesperson emphasized the importance of the value created for customers beyond just device sales, highlighting that the Devices & Services organization has established multiple profitable ventures and is poised for future success.
In a separate development, Amazon’s new AI-powered version of Alexa, showcased in September, is reportedly behind schedule. Former employees have indicated that the company lacks sufficient data and access to the necessary hardware to support the advanced language model driving the upgraded virtual assistant. Amazon has reportedly shifted its focus towards developing generative AI for its cloud computing division, Amazon Web Services.
In response to criticism, Amazon stated that former employees are misinformed about the company’s current AI initiatives, asserting that the Amazon Artificial General Intelligence team has access to the needed Trainium chips and Nvidia GPUs. The company’s commitment to developing a leading personal assistant remains unchanged.