Amazon’s efforts to monetize its Alexa-enabled devices have reportedly resulted in substantial financial losses for the company, totaling over $25 billion between 2017 and 2021. This information comes from internal documents and sources familiar with the matter, as reported by the Wall Street Journal. Despite the widespread adoption of its devices, users predominantly utilize the Alexa-enabled Echo for functions like setting alarms rather than shopping on Amazon.
A former senior employee expressed concerns about the company’s focus, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to the situation, Amazon CEO Andy Jassy is reportedly seeking solutions, including the introduction of a paid tier for its voice assistant. However, some engineers involved in the development are reportedly skeptical about the potential success of this initiative.
An Amazon spokesperson emphasized the company’s commitment to creating value through its services beyond just device sales, noting that its Devices & Services division has successfully established profitable ventures and is positioned for future growth.
Moreover, the company unveiled a new AI-powered version of Alexa in September, but former employees have indicated that it is far from ready. The company lacks sufficient data and access to the necessary chips to operate the advanced large language model that would enhance the virtual assistant. Reports suggest that Amazon has shifted its focus towards generative AI for its cloud computing sector, Amazon Web Services.
In response to these concerns, Amazon maintained that its former employees are misinformed about its current AI initiatives, asserting that its Artificial General Intelligence team has access to essential resources, including proprietary Trainium chips and Nvidia GPUs. The company’s ongoing goal is to develop what it aims to be the premiere personal assistant.