Amazon’s strategy to generate revenue from its Alexa-enabled devices has apparently fallen short, resulting in significant financial losses for the company, estimated at over $25 billion between 2017 and 2021. According to a report from the Wall Street Journal, which references internal documents and sources familiar with the situation, the online retail giant’s Echo and Kindle devices are primarily used for basic functions like setting alarms, rather than for shopping through Amazon.
A former senior employee indicated concerns within the company, stating, “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 the introduction of a paid version of its voice assistant, though there is skepticism among some engineers about the potential impact of this new tier.
An Amazon spokesperson noted the company’s focus on creating value from its services usage rather than solely on device sales. They emphasized that the Devices & Services division is already supporting various profitable ventures and is expected to continue in this direction.
On another front, Amazon’s latest AI-enhanced Alexa, showcased in September, is reportedly far from complete, according to former staff members. They cited insufficient data and a lack of access to necessary processing chips for the large language model engine behind the new virtual assistant. Furthermore, the company has shifted its focus toward developing generative AI solutions for its Amazon Web Services cloud division.
In response to critiques from former employees, Amazon has asserted that their claims regarding Alexa’s AI capabilities are incorrect and that the Amazon Artificial General Intelligence team indeed has access to the required in-house Trainium chips and Nvidia GPUs. The company’s ambition for Alexa is to create the best personal assistant in the world.