Amazon’s strategy to generate revenue from its Alexa-enabled devices has reportedly led to substantial financial losses for the company, amounting to over $25 billion between 2017 and 2021. This information stems from internal documents and insights from unnamed sources, as highlighted by the Wall Street Journal. Although Amazon has attracted hundreds of millions of customers to its devices, it appears that most users primarily engage with Alexa for basic functions, such as setting alarms, rather than using it as a shopping tool.
Concerns have been raised by former employees, with one 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, including the rollout of a paid version of the voice assistant. However, some engineers involved in developing this upgrade remain skeptical about its potential impact.
An Amazon representative emphasized that the company is concentrating on the value its services provide to customers, beyond just device sales. “Our Devices & Services organization has established numerous profitable businesses for Amazon and is well-positioned to continue doing so going forward,” they stated.
In addition, reports indicate that Amazon’s new AI-powered Alexa, which was demonstrated in September, is not yet ready for release. Former employees have mentioned that the company lacks sufficient data and the necessary chips to support the large language model that underpins this version of the virtual assistant. Furthermore, Amazon has shifted its focus away from the AI-enhanced Alexa to prioritize the development of generative AI for its cloud computing sector, Amazon Web Services.
Amazon has countered these claims, asserting that its former employees are misinformed about current efforts related to Alexa’s AI. The company insists that its Artificial General Intelligence team has access to proprietary Trainium chips, as well as Nvidia graphics processing units, and reiterates its commitment to creating the best personal assistant in the world.