Amazon’s initiative to generate revenue through its Alexa-enabled devices has 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, it appears that the primary functions of the Echo speakers are limited to basic tasks such as setting alarms and using free applications, rather than facilitating purchases on Amazon.
A former senior employee expressed concerns about the misallocation of resources, lamenting, “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 seeking solutions, including the introduction of a paid version of Alexa. However, some engineers involved in this development remain skeptical about its potential effectiveness.
An Amazon spokesperson emphasized that the company is focused on creating value through customer engagement with its services, rather than solely through device sales. They noted that the Devices & Services organization has successfully established profitable business ventures and is poised for continued success.
In addition, concerns have been raised regarding the readiness of Amazon’s new AI-powered Alexa, which was showcased in September. Former employees have stated that the technology lacks sufficient data and necessary chips for the large language model. Furthermore, it appears that Amazon has shifted its priorities towards developing generative AI for its cloud service, Amazon Web Services, leaving the new Alexa features on the back burner.
Amazon has disputed claims from former employees, asserting that they are misinformed about the current progress of its Alexa AI initiatives. The company maintains that its Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia graphics processing units, and it remains committed to building the most advanced personal assistant in the world.