Amazon’s investment in its Alexa-enabled devices has reportedly resulted in significant financial losses, amounting to over $25 billion from 2017 to 2021, according to the Wall Street Journal. Internal documents and sources familiar with the company’s operations revealed that while Amazon has attracted hundreds of millions of customers to its devices, the usage of Alexa-enabled Echo speakers often revolves around basic tasks like setting alarms, rather than facilitating purchases.
A former senior employee noted concerns within the company, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to these challenges, Amazon CEO Andy Jassy is seeking solutions and is reportedly planning to introduce a paid version of Alexa. However, there are concerns among engineers about whether this change will have a meaningful impact.
An Amazon spokesperson emphasized that the company’s focus is on the value generated when customers engage with its services, not solely on device sales. They claimed that the Devices & Services division has created several profitable ventures and is well-positioned for future success.
Additionally, Amazon’s newly announced AI-powered version of Alexa, showcased in September, is reportedly not ready for launch, according to former employees. Issues mentioned include insufficient data and limited access to the necessary chips to run the large language model (LLM) behind the new assistant. The company has reportedly shifted priorities to enhance generative AI capabilities within Amazon Web Services instead.
In response to these claims, Amazon maintains that its former employees are misinformed about its Alexa AI initiatives, asserting that the Amazon Artificial General Intelligence team has access to the necessary chips from its in-house production and Nvidia’s GPUs. The company reiterated its commitment to developing what it aims to be the world’s best personal assistant.