Amazon’s attempt to generate revenue through its Alexa-enabled devices has reportedly resulted in significant financial losses, amounting to over $25 billion from 2017 to 2021. According to the Wall Street Journal, internal documents and sources familiar with the situation indicate that while Amazon boasts hundreds of millions of customers for its devices, the Echo speakers are primarily utilized for functions like setting alarms rather than facilitating purchases.
The report reveals a concern expressed by a former senior Amazon employee, who highlighted the hiring of 10,000 individuals to develop the technology, only to see it used primarily as a “smart timer.”
In response to these setbacks, Amazon CEO Andy Jassy is exploring solutions, including the introduction of a paid tier for its voice assistant. However, some engineers involved in developing this paid version are skeptical about its potential success.
An Amazon spokesperson emphasized the company’s focus on the value created through customer interactions with their services, rather than solely through device sales, claiming that their Devices & Services organization has successfully established several profitable business ventures.
In addition, Amazon’s latest AI-enhanced version of Alexa, showcased in September, is reportedly far from completion. Former employees have indicated that the company lacks sufficient data and access to the necessary chips to operate the large language models designed for the new assistant. Furthermore, Amazon has shifted its priorities to concentrate on generative AI for its Amazon Web Services division.
Amazon refuted claims made by former employees, asserting that they are misinformed regarding the company’s current efforts in Alexa AI, and that the Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs. The company’s objective for Alexa, they affirmed, remains unchanged: to develop the world’s leading personal assistant.