Amazon’s strategy to profit from its Alexa-enabled devices has reportedly fallen short and resulted in significant financial losses for the company, totaling over $25 billion from 2017 to 2021. According to the Wall Street Journal, internal documents and sources close to Amazon indicate that while the company boasts hundreds of millions of device users, the Echo speakers are primarily utilized for basic functions like setting alarms rather than for shopping.
A former senior Amazon employee expressed concerns, noting, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In light of these challenges, CEO Andy Jassy is seeking solutions and is expected to introduce a paid version of the voice assistant. However, some engineers working on this project have expressed skepticism about its potential impact.
In a statement, an Amazon spokesperson emphasized the company’s commitment to creating value beyond device sales, highlighting that their Devices & Services division has established several profitable ventures and is poised for further success.
In addition, the company showcased a new AI-driven version of Alexa in September, although former employees claim it is far from ready. They report that Amazon lacks sufficient data and the necessary chips for the large language model that will power the new assistant. Furthermore, it appears Amazon has shifted its priorities to focus on developing generative AI for its cloud services through Amazon Web Services, sidelining work on the AI-enhanced Alexa.
Amazon responded by asserting that its former employees’ assessments are inaccurate regarding its current AI initiatives, stating that the Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs. The company remains committed to its vision of developing the world’s leading personal assistant.