Amazon’s efforts to generate revenue through its Alexa-enabled devices have reportedly resulted in significant financial losses, amounting to over $25 billion between 2017 and 2021. This information comes from the Wall Street Journal, which cites internal documents and sources familiar with the situation. Although Amazon has attracted hundreds of millions of customers to its devices, it appears that users primarily utilize the Alexa-enabled Echo speakers for tasks such as setting alarms, rather than for making purchases on Amazon.
A former senior employee expressed concern, noting the irony of Amazon hiring 10,000 people but largely creating what they call a “smart timer.” In response to these challenges, Amazon CEO Andy Jassy is allegedly exploring solutions, including the introduction of a paid tier for its voice assistant. However, some of the engineers working on this new version have voiced skepticism about its potential effectiveness.
An Amazon spokesperson emphasized the company’s focus on the value created for customers beyond just device sales, asserting that the Devices & Services division has successfully established several profitable businesses and is poised for future success.
In addition, Amazon’s latest artificial intelligence-enhanced Alexa, which was showcased in September, is reportedly not yet ready for deployment. Former employees indicate that the company lacks sufficient data and the necessary chips to support the large language model (LLM) intended for this new iteration of the assistant. Instead, Amazon is purportedly prioritizing generative AI development for its cloud computing arm, Amazon Web Services.
Contradicting this narrative, Amazon has stated that its former employees are misinformed and that its Artificial General Intelligence team has access to both proprietary Trainium chips and Nvidia GPUs. The company maintains its commitment to creating the world’s best personal assistant.