Amazon’s initiative to generate revenue from its Alexa-enabled devices appears to have backfired significantly, leading the company to incur losses exceeding $25 billion between 2017 and 2021, as reported by the Wall Street Journal. Internal documents and sources familiar with the situation revealed that while the retail giant boasts hundreds of millions of users across its devices, many utilize the Alexa-enabled Echo speakers mainly for basic functions like setting alarms rather than for shopping on Amazon.
A former senior employee remarked, “We worried we’ve hired 10,000 people and we’ve built a smart timer,” indicating concerns about the effectiveness of the product. In response to these setbacks, Amazon’s CEO Andy Jassy is reportedly exploring solutions, including the introduction of a paid version of the Alexa voice assistant. However, some engineers working on this upgrade are skeptical about its potential to drive significant change.
An Amazon spokesperson emphasized the company’s commitment to creating value for users of its services, stating, “Our Devices & Services organization has established numerous profitable businesses for Amazon and is well-positioned to continue doing so going forward.”
In addition, reports indicate that Amazon’s new AI-enhanced version of Alexa, presented in September, is not yet ready for deployment due to insufficient data and a lack of necessary chips to support the advanced language model. There are claims that Amazon shifted its focus towards developing generative AI for its cloud service, Amazon Web Services, rather than prioritizing the AI capabilities of Alexa.
However, Amazon refuted these claims, asserting that its former employees are misinformed about the current status of Alexa’s AI development. The company affirmed that the Amazon Artificial General Intelligence team has access to the essential in-house Trainium chips and Nvidia GPUs, reiterating its commitment to creating the world’s best personal assistant.