Amazon’s efforts to profit from its Alexa-enabled devices have reportedly resulted in significant financial losses, amounting to over $25 billion between 2017 and 2021. This figure, cited by the Wall Street Journal, stems from internal documents and sources familiar with the matter. Despite having hundreds of millions of customers utilizing its devices, many users primarily engage with Amazon’s Echo speakers for basic functions like setting alarms and using free apps rather than making purchases.
A former senior Amazon employee expressed frustration, highlighting the company’s investment in hiring thousands of personnel only to produce a smart timer. In response to these challenges, Amazon CEO Andy Jassy is exploring solutions, including the introduction of a paid tier for its voice assistant. However, some engineers involved in the paid version of Alexa are skeptical about its potential impact.
An Amazon spokesperson emphasized that the company prioritizes the value delivered through its services. They noted that the Devices & Services arm has successfully launched several profitable ventures for Amazon and is well-equipped to continue this trend.
Additionally, the development of a new AI-powered version of Alexa, showcased by the company in September, is allegedly far from completion. Former employees indicated that Amazon lacks sufficient data and the necessary chips to support the large language model (LLM) essential for the upgraded assistant. Reports suggest that the company has shifted its focus from AI improvements for Alexa to generative AI development for its cloud computing service, Amazon Web Services.
Amazon has countered these criticisms, asserting that the insights from former employees are incorrect and lacking information regarding the company’s current AI initiatives. The Amazon Artificial General Intelligence team is claimed to have access to both in-house Trainium chips and Nvidia GPUs, with a steadfast commitment to developing what they aim to be the world’s premier personal assistant.