Amazon’s strategy to profit from its Alexa-enabled devices has reportedly resulted in substantial financial losses, amounting to over $25 billion between 2017 and 2021. According to a report by the Wall Street Journal, internal documents and sources familiar with the matter reveal that while Amazon has attracted hundreds of millions of customers, the Alexa-enabled Echo speakers are primarily used for basic functions like setting alarms, rather than shopping on the platform.
A former senior Amazon employee expressed concern over the situation, noting, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these challenges, CEO Andy Jassy is seeking solutions and is reportedly launching a paid version of the voice assistant. However, some engineers involved in developing this paid tier have doubts about its potential effectiveness.
An Amazon spokesperson emphasized the company’s focus is on creating value for customers using its services, rather than simply on device sales. They asserted that the Devices & Services organization has cultivated numerous profitable ventures for Amazon and is poised to continue this trend.
Additionally, Amazon’s new AI-powered Alexa, which was showcased in September, is said to be far from ready, as former employees claim the company lacks sufficient data and access to the necessary chips for operating the advanced language model behind the new assistant. Amazon is also believed to have shifted its priorities towards enhancing generative AI within its cloud computing division, Amazon Web Services.
In response to these claims, Amazon stated that former employees are misinformed regarding its current AI efforts, asserting that the Amazon Artificial General Intelligence team has access to both its in-house Trainium chips and Nvidia GPUs. The company’s overarching goal for Alexa remains to develop the “world’s best personal assistant.”