Amazon’s efforts to profit from its Alexa-enabled devices have not met expectations, reportedly resulting in losses of over $25 billion from 2017 to 2021, as indicated by internal documents and unnamed sources cited by the Wall Street Journal. Despite boasting hundreds of millions of customers for its devices, usage statistics reveal that many people primarily utilize Alexa-enabled Echo speakers for free applications like alarms, rather than shopping on Amazon.
A former senior Amazon employee expressed concerns about the effectiveness of the company’s hiring, questioning the value of creating what they referred to as “a smart timer.” In response to the situation, Amazon’s CEO Andy Jassy is exploring solutions, including the potential launch of a paid tier for its voice assistant. However, some engineers reportedly doubt that this addition will significantly impact usage or sales.
An Amazon representative emphasized the company’s focus on the value generated from customer interactions with their services, stating that the Devices & Services division has cultivated numerous profitable business ventures and is positioned for ongoing success.
In other developments, Amazon’s new AI-powered version of Alexa, unveiled in September, is said to be far from ready, according to former employees. They claim that the company lacks sufficient data and necessary chips to effectively operate the large language model that will enhance the virtual assistant. Moreover, Amazon has reportedly shifted its priorities to concentrate on developing generative AI for its cloud computing sector, Amazon Web Services.
Amazon dismissed claims from former employees as inaccurate, asserting that the Amazon Artificial General Intelligence team has access to both its proprietary Trainium chips and Nvidia GPUs. The company remains committed to its goal of building “the world’s best personal assistant.”