Amazon’s strategy to generate revenue from its Alexa-enabled devices has reportedly resulted in significant losses, amounting to over $25 billion from 2017 to 2021, according to internal documents disclosed by the Wall Street Journal. Despite having hundreds of millions of customers for its range of devices, it appears that many users primarily utilize Alexa-enabled Echo speakers for basic functions like setting alarms, rather than for shopping on Amazon.
A former senior employee expressed concerns about the company’s investment, remarking, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these challenges, Amazon’s CEO Andy Jassy is seeking solutions, and the company is considering launching a paid subscription service for its voice assistant. However, insiders have voiced doubts about whether this initiative will have the desired impact.
An Amazon representative stated, “We are focused on the value we create when customers use our services, not just when they buy our devices,” emphasizing that their Devices & Services division has successfully established profitable ventures. Nonetheless, the development of Amazon’s new AI-powered Alexa, showcased in September, is reportedly behind schedule. Former employees indicate that the company lacks sufficient data and access to essential technology to support the large language model required for this upgraded virtual assistant.
In defense of its efforts, Amazon countered claims from former staff, asserting that its Artificial General Intelligence team has access to both its own Trainium chips and Nvidia GPUs. The company remains committed to its goal of developing the world’s premier personal assistant.