Amazon’s attempt to monetize its Alexa-enabled devices has reportedly fallen short, resulting in significant financial losses for the company, estimated at over $25 billion between 2017 and 2021, according to internal documents cited by the Wall Street Journal. Despite boasting hundreds of millions of customers using its devices, it appears that most interactions with Alexa-enabled Echo speakers involve basic functions such as setting alarms, rather than shopping on Amazon.
A former senior employee stated, “We worried we’ve hired 10,000 people and we’ve built a smart timer,” highlighting concerns about the effectiveness of the technology. In response, Amazon CEO Andy Jassy is seeking solutions, including the launch of a paid tier for the voice assistant. However, some engineers working on this initiative have expressed doubts about its potential success.
An Amazon spokesperson emphasized that the company focuses on the value created through its services, rather than solely on device sales. They noted that the Devices & Services division has successfully established several profitable ventures and is poised to continue this trend.
On another front, Amazon’s newly announced AI-powered Alexa, which was showcased in September, reportedly faces significant developmental challenges. Former employees indicated that the necessary data and hardware, specifically the chips for the large language model (LLM) crucial to the assistant’s advancement, are lacking. The company has also shifted its focus toward developing generative AI for its cloud computing branch, Amazon Web Services, rather than prioritizing advancements on AI-driven Alexa.
In response to these criticisms, Amazon maintained that former employees are misinformed, asserting that the Amazon Artificial General Intelligence team does have access to the needed Trainium chips and Nvidia graphics processing units (GPUs). The company reiterated its commitment to creating “the world’s best personal assistant” through Alexa.