Amazon’s strategy to profit from its Alexa-enabled devices has reportedly resulted in financial losses amounting to billions. According to the Wall Street Journal, the online retail giant lost over $25 billion on its Echo, Kindle, and other devices between 2017 and 2021, based on internal documents and sources familiar with the situation. While Amazon boasts hundreds of millions of customers using its devices, the Alexa-enabled Echo speakers are primarily employed for simple tasks like setting alarms rather than facilitating shopping on 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 these challenges, Amazon CEO Andy Jassy is reportedly exploring solutions, including the introduction of a paid version of its voice assistant. However, some engineers involved in developing the paid version of Alexa have expressed skepticism about its potential effectiveness, according to the Wall Street Journal.
An Amazon spokesperson commented, “We’re focused on the value we create when customers use our services, not just when they buy our devices.” The spokesperson emphasized that the Devices & Services organization has established numerous profitable ventures for Amazon and is poised to continue that trend.
Simultaneously, Amazon’s new AI-enhanced Alexa, which was demonstrated in September, is said to be far from ready, as per accounts from former employees. They claim the company lacks sufficient data and the necessary chips to operate the advanced language model that will power this updated version of its virtual assistant. Moreover, reports indicate that Amazon has shifted its focus towards developing generative AI for its cloud services division, Amazon Web Services.
In response, Amazon asserts that claims from former employees regarding its AI initiatives for Alexa are incorrect. The company insists that the Amazon Artificial General Intelligence team has access to essential resources, including its proprietary Trainium chips and Nvidia GPUs, and maintains its commitment to creating “the world’s best personal assistant.”