Amazon’s efforts to monetize its Alexa-enabled devices have reportedly resulted in significant losses for the company, amounting to over $25 billion from 2017 to 2021, according to internal documents and sources familiar with the situation. While the online retailer has attracted hundreds of millions of customers for its devices, the primary uses of Alexa-enabled Echo speakers appear to be setting alarms and utilizing free applications rather than facilitating shopping on Amazon.
A former senior Amazon employee expressed concerns about the company’s investments, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” Now, Amazon CEO Andy Jassy is seeking solutions, including the introduction of a paid version of the voice assistant. However, some engineers involved in the development are reportedly skeptical about its potential success.
An Amazon spokesperson emphasized that the company is focused on creating value for customers through its services rather than solely through device sales. They stated, “Our Devices & Services organization has established numerous profitable businesses for Amazon and is well-positioned to continue doing so going forward.”
In addition, Amazon’s new AI-enhanced Alexa, which was showcased in September, is reportedly facing delays. Former employees claim that the company lacks sufficient data and access to the necessary processing chips to support the advanced language model required for the new version of the virtual assistant. Reports indicate that Amazon has shifted its focus toward developing generative AI for its Amazon Web Services cloud segment, which has led to a deprioritization of AI advancements for Alexa.
In response to these criticisms, Amazon asserted that its former employees are misinformed about the current state of its Alexa AI projects, claiming that the Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs. The company reiterated its commitment to building “the world’s best personal assistant.”