Amazon’s strategy to generate revenue through its Alexa-enabled devices has faced considerable challenges, reportedly costing the company billions. According to internal documents cited by the Wall Street Journal, Amazon incurred losses exceeding $25 billion from its Echo, Kindle, and other devices between 2017 and 2021. Despite having hundreds of millions of customers utilizing its devices, the Alexa-enabled Echo speakers are predominantly employed for tasks like setting alarms rather than facilitating purchases on Amazon.
A former senior employee expressed concerns, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response, Amazon CEO Andy Jassy is seeking solutions and is considering launching a premium version of its voice assistant. However, some engineers involved in the paid version of Alexa are skeptical about its potential effectiveness.
An Amazon spokesperson asserted that the company prioritizes the value created for customers using its services beyond device purchases. They highlighted that the Devices & Services organization has developed several profitable businesses and is well-positioned for future success.
Additionally, Amazon’s latest AI-integrated version of Alexa, unveiled in September, is reportedly not on track for readiness, according to former employees. Challenges such as insufficient data and a lack of access to the necessary chips for the large language model (LLM) powering the new assistant have been noted. There are also claims that the company has shifted its focus from the AI-driven Alexa to enhancing generative AI for Amazon Web Services, its cloud computing division.
Amazon has refuted the claims from former employees, asserting that they are misinformed regarding the company’s ongoing AI initiatives for Alexa. The Amazon Artificial General Intelligence team reportedly has access to both in-house Trainium chips and Nvidia graphics processing units (GPUs), with the goal of creating “the world’s best personal assistant.”