Amazon’s efforts to profit from its Alexa-enabled devices have reportedly fallen short, resulting in losses of over $25 billion from 2017 to 2021, according to internal documents and sources cited by the Wall Street Journal. While the company boasts hundreds of millions of users for its devices, the Echo speakers are mainly used for basic functions like setting alarms rather than shopping on Amazon.
A former senior Amazon employee expressed concerns about 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 introducing a paid tier for Alexa. However, some engineers at Amazon are skeptical that this will significantly improve the situation.
An Amazon spokesperson emphasized that the company prioritizes the value created when customers use their services, rather than solely focusing on device sales. They stated that the Devices & Services division has established several profitable enterprises for Amazon and is well-positioned for future success.
Additionally, the new AI-powered version of Alexa, demonstrated in September, is reportedly not ready for launch. Former employees have indicated that the company lacks sufficient data and access to the necessary chips to operate the advanced language model for the updated assistant. Moreover, Amazon has allegedly shifted its focus towards developing generative AI for its cloud computing arm, Amazon Web Services.
In response to these criticisms, Amazon contends that the views of former employees are inaccurate, asserting that the Amazon Artificial General Intelligence team has access to both proprietary Trainium chips and Nvidia GPUs. The company remains committed to its goal of creating the world’s premier personal assistant.