Amazon’s efforts to monetize its Alexa-enabled devices have reportedly resulted in significant financial losses, totaling more than $25 billion from 2017 to 2021, according to internal documents and sources familiar with the situation. Despite boasting hundreds of millions of customers, the usage of Alexa-enabled Echo speakers has been primarily for routine tasks like setting alarms, rather than shopping on Amazon.
A former senior employee expressed concern, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In light of these challenges, Amazon CEO Andy Jassy is seeking a solution, which includes the potential introduction of a paid tier for its voice assistant. However, some engineers involved in the development of this premium version are skeptical about its potential impact.
An Amazon spokesperson highlighted the company’s emphasis on the value created when customers utilize their services, asserting that the Devices & Services organization has established numerous profitable ventures and is positioned to continue doing so.
Meanwhile, reports indicate that Amazon’s new AI-enhanced version of Alexa, showcased in September, may not be ready for launch, with former employees claiming the company lacks sufficient data and hardware to support the advanced language model at the core of the upgrade. Additionally, Amazon is said to have shifted its focus toward developing generative AI for its cloud computing division, Amazon Web Services, rather than prioritizing the AI-powered Alexa.
In response to these claims, Amazon stated that former employees are misinformed about the company’s current AI initiatives, asserting that the Amazon Artificial General Intelligence team has access to necessary resources, including in-house Trainium chips and Nvidia GPUs. The firm reaffirmed its commitment to its goal of creating the world’s best personal assistant.