Amazon’s initiative to profit from its Alexa-enabled devices has not achieved the expected results, reportedly costing the company billions. Between 2017 and 2021, Amazon faced losses exceeding $25 billion from its Echo, Kindle, and other devices, as indicated by internal documents and insights from unnamed sources, according to the Wall Street Journal. Despite having hundreds of millions of users, Alexa-enabled Echo speakers are primarily utilized for setting alarms and other free applications, rather than for making purchases on Amazon.
A former senior Amazon employee expressed concern about the workforce, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to these challenges, Amazon’s CEO Andy Jassy is seeking solutions and is reportedly launching a paid version of its voice assistant. However, some engineers involved in developing this new tier are skeptical about its potential impact, as noted by the Wall Street Journal.
An Amazon spokesperson emphasized that the company is prioritizing the value created through its services, not just the sale of devices. They stated that the Devices & Services division has successfully established several profitable ventures and is poised to continue doing so.
Furthermore, it has been reported that Amazon’s new artificial intelligence-powered Alexa, showcased in September, is far from ready. Former employees have claimed the company lacks sufficient data and access to the necessary chips for the large language model driving this version of its virtual assistant. Moreover, Amazon is said to be prioritizing generative AI development for its cloud service, Amazon Web Services, over the AI-enhanced Alexa.
In response to these claims, Amazon contended that its former employees misunderstand the status of its Alexa AI projects, asserting that the Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs, and reaffirming the commitment to creating “the world’s best personal assistant.”