Amazon’s efforts to profit from its Alexa-enabled devices have reportedly resulted in significant losses for the company, amounting to over $25 billion between 2017 and 2021. According to internal documents and sources cited by the Wall Street Journal, despite having hundreds of millions of customers using devices like the Echo and Kindle, many users primarily utilize these products for basic functions such as setting alarms rather than shopping on Amazon.
A former senior employee expressed concern over the situation, 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 set to introduce a paid tier for its voice assistant. Nonetheless, some engineers involved in the development of this paid version have voiced skepticism about its potential effectiveness.
An Amazon spokesman emphasized that the company is committed to enhancing the value provided to customers through its services rather than focusing solely on device sales. They noted that the Devices & Services division has successfully established profitable ventures and is positioned for continued success.
In addition, the new AI-enhanced version of Alexa that Amazon showcased in September is reportedly still in developmental limbo, according to former employees. Concerns have been raised regarding insufficient data and access to necessary chips for running the large language model that underpins this new version. It is also said that Amazon has shifted its priorities to focus more on generative AI for its cloud computing branch, Amazon Web Services.
Amazon has disputed claims made by former employees, asserting that they are misinformed about the current status of Alexa’s AI development. The company maintains that the Amazon Artificial General Intelligence team has access to essential resources, including in-house Trainium chips and Nvidia graphics processing units (GPUs), with the goal of creating “the world’s best personal assistant.”