Amazon’s efforts to generate revenue from its Alexa-enabled devices have reportedly resulted in significant losses, amounting to over $25 billion from 2017 to 2021, according to the Wall Street Journal. Internal documents and sources familiar with the situation indicate that while Amazon has successfully attracted hundreds of millions of customers to its devices, the primary use of its Alexa-enabled Echo speakers has been for basic functions like setting alarms, rather than shopping.
Concerns have emerged within the company, with a former senior employee expressing apprehension about the workforce expansion, 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 seeking solutions, including the introduction of a paid version of the voice assistant. However, some engineers are skeptical about whether this approach will yield significant results.
An Amazon spokesperson emphasized the company’s focus on the value created through customer engagement with its services, not merely device sales. They noted that Amazon’s Devices & Services division has established various profitable ventures and is poised for future success.
Additionally, Amazon’s newly showcased AI-powered version of Alexa has been reported by former employees as being far from ready. According to Fortune, the company lacks adequate data and access to the necessary chips to support the advanced language model for its updated virtual assistant. Furthermore, there are claims that Amazon has shifted its priorities to concentrate on generative AI development within its cloud computing segment, Amazon Web Services.
In response to these reports, Amazon refuted claims made by its former employees, asserting that they are misinformed regarding the current state of Alexa’s AI projects. The company affirmed that the Amazon Artificial General Intelligence team has access to essential resources, including in-house Trainium chips and Nvidia GPUs. Its overarching goal remains clear: to create “the world’s best personal assistant.”