Amazon’s initiative to monetize its Alexa-enabled devices has fallen short, with reports indicating the company has incurred losses exceeding $25 billion from 2017 to 2021 on products such as Echo and Kindle. According to the Wall Street Journal, which cites internal documents and sources familiar with the situation, the widespread usage of these devices is primarily for basic functions like setting alarms, rather than for shopping on Amazon.
A former senior employee expressed concern over the company’s investment in extensive hiring and development, remarking, “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 launch of a paid version of the Alexa voice assistant. However, some employees have raised doubts about the potential effectiveness of this strategy.
An Amazon spokesperson stated that the company prioritizes the value generated from customer interactions with its services rather than solely focusing on device sales. They emphasized that the Devices & Services division has successfully established various profitable ventures for the company and is well-equipped to sustain this success.
In addition, reports have emerged suggesting that Amazon’s new AI-enhanced Alexa, recently showcased in a demo, is not yet fully developed. Former employees have indicated that the company lacks the necessary data and access to the chips required for the advanced language model that will drive the updated virtual assistant. Instead, Amazon has shifted its focus to advancing generative AI capabilities within its cloud computing sector, Amazon Web Services.
Amazon has refuted claims from former employees, asserting that they are misinformed regarding the company’s AI initiatives and maintaining that the Amazon Artificial General Intelligence team has access to vital resources, including in-house Trainium chips and Nvidia GPUs. The company remains committed to its objective: to create the world’s leading personal assistant.