Amazon’s initiative to generate profits through its Alexa-enabled devices has reportedly fallen short, resulting in substantial losses for the company, amounting to over $25 billion from 2017 to 2021, according to the Wall Street Journal, which referenced internal documents and sources familiar with the situation. Despite having hundreds of millions of customers using its devices, it appears that the primary function of the Alexa-enabled Echo speakers is for basic tasks like setting alarms, rather than facilitating purchases.
A former senior employee at Amazon expressed concern over the situation, suggesting that the company may be overstaffed for a product that hasn’t met expectations. In response, CEO Andy Jassy is reportedly seeking solutions, including the introduction of a paid version of the voice assistant. However, some engineers involved in this project are skeptical about its potential effectiveness.
An Amazon spokesperson highlighted the company’s focus on the value derived from its services and noted that the Devices & Services division has established several profitable initiatives and is positioned for continued success.
Meanwhile, reports indicate that Amazon’s new AI-enhanced version of Alexa, which was showcased in September, is not yet prepared for launch, according to former employees. They mentioned issues with data availability and access to necessary technology for the large language model that supports the new assistant. Furthermore, it is said that Amazon has shifted its attention from the AI-powered Alexa to prioritize generative AI developments within its cloud computing sector, Amazon Web Services.
In response to these claims, Amazon contended that its former employees are misinformed regarding the status of Alexa AI initiatives and reassured that the company has the required resources, including its in-house chips and Nvidia GPUs. The company affirmed its commitment to developing what it aims to be the world’s leading personal assistant.