Amazon’s initiative to generate revenue from its Alexa-enabled devices has reportedly resulted in significant losses, totaling over $25 billion from 2017 to 2021, according to an article by the Wall Street Journal. Internal documents and sources suggest that while the company boasts hundreds of millions of customers using its devices, most interactions with Alexa-enabled Echo speakers revolve around basic tasks such as setting alarms, rather than shopping through Amazon.
A former senior Amazon employee expressed concerns, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to the mounting losses, Amazon CEO Andy Jassy is seeking solutions. The company is reportedly planning to introduce a paid tier for its voice assistant, although some engineers involved with this initiative doubt its potential impact.
An Amazon spokesperson countered these sentiments, emphasizing the importance of the value created for customers using their services beyond just device sales. They highlighted that Amazon’s Devices & Services division has established several profitable ventures and is positioned for future success.
Additionally, Amazon’s newly unveiled AI-powered Alexa, demonstrated in September, is reportedly still underdeveloped, with insufficient data and limited access to required chips for its large language model, according to former employees. Rather than prioritizing this new version of Alexa, the company is shifting focus to bolster generative AI for its cloud computing service, Amazon Web Services.
In response to these claims, Amazon asserted that its former employees are misinformed, stating that the Alexa AI team has access to both in-house Trainium chips and Nvidia GPUs. The company’s ongoing objective for Alexa is to create the “world’s best personal assistant.”