Amazon’s efforts to monetize its Alexa-enabled devices have reportedly resulted in significant financial losses, amounting to over $25 billion between 2017 and 2021. Internal documents and sources familiar with the situation indicate that while Amazon has a vast customer base for its devices, the Echo speakers are predominantly used for basic functions such as setting alarms rather than shopping on the platform.
Concerns about this situation were highlighted by a former senior Amazon employee who mentioned, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In light of these challenges, CEO Andy Jassy is reportedly exploring solutions to the issue, including the introduction of a paid tier for Alexa. However, some engineers involved in developing this version have voiced doubts about its potential impact.
An Amazon spokesperson defended the company’s approach, stating, “Our Devices & Services organization has established numerous profitable businesses for Amazon and is well-positioned to continue doing so going forward.”
In the meantime, Amazon’s latest AI-powered iteration of Alexa, which was showcased in September, is said to be far from ready according to former employees. Reports suggest that the company lacks sufficient data and the necessary chips to support the new large language model intended for this version of the assistant. Additionally, Amazon appears to be shifting its focus towards developing generative AI for its cloud computing division, Amazon Web Services, rather than prioritizing the new Alexa.
Amazon has rebutted claims from its former employees, asserting that they are misinformed about the current state of its AI initiatives. The company emphasized that its Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia graphics processing units to further its goal of creating the “world’s best personal assistant.”