Amazon’s initiative to profit from its Alexa-enabled devices has reportedly resulted in significant losses for the company, totaling more than $25 billion from 2017 to 2021, according to the Wall Street Journal. Internal documents and sources familiar with the situation indicate that although Amazon has attracted hundreds of millions of customers for its devices, the Echo speakers are primarily utilized for setting alarms and using free applications rather than for shopping on Amazon.
A former senior Amazon employee expressed concerns about the situation, 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, with plans to introduce a paid version of its voice assistant. However, some engineers involved in this project are skeptical about its potential impact.
An Amazon spokesperson commented, “We’re focused on the value we create when customers use our services, not just when they buy our devices,” adding that the Devices & Services organization has launched several profitable ventures and is well-prepared for future success.
In addition, Amazon’s new AI-driven version of Alexa, revealed in September, is reportedly far from completion. Former employees cited a lack of necessary data and chips to support the large language model that would enable the new virtual assistant. The company has reportedly shifted its focus towards developing generative AI for Amazon Web Services instead.
Amazon has refuted claims from former employees, asserting that they are misinformed regarding the current progress of its Alexa AI initiatives. The company insists that its Artificial General Intelligence team has access to appropriate resources, including in-house Trainium chips and Nvidia GPUs, reaffirming its commitment to building “the world’s best personal assistant.”