Amazon’s initiative to monetize its Alexa-enabled devices has reportedly resulted in significant financial losses, amounting to over $25 billion from 2017 to 2021. This information comes from internal documents and sources familiar with the matter, as reported by the Wall Street Journal. Despite having hundreds of millions of customers, the usage of Amazon’s Echo speakers largely revolves around basic tasks like setting alarms, rather than purchasing products on the Amazon platform.
A former senior employee expressed disappointment, commenting, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to these issues, Amazon CEO Andy Jassy is exploring a solution by introducing a paid tier for the voice assistant. However, some engineers involved in the development of the paid version have expressed skepticism about its potential effectiveness, according to the Wall Street Journal.
An Amazon spokesperson emphasized the company’s focus on delivering value through its services rather than solely through device sales, stating that the Devices & Services team has created several profitable ventures for Amazon, with plans to continue doing so.
Additionally, the new AI-powered version of Alexa, showcased in September, is reportedly not yet ready for deployment. Former employees have indicated that the company lacks sufficient data and access to the necessary chips for the advanced language model driving the upgraded assistant. Furthermore, Amazon has shifted its focus to developing generative AI for its cloud computing division, Amazon Web Services, rather than prioritizing the AI iteration of Alexa.
In response to criticisms from former employees, Amazon asserted that they are misinformed regarding the current status of Alexa’s AI development. The company maintained that its Artificial General Intelligence team has access to essential technology, including in-house Trainium chips and Nvidia GPUs, reiterating its commitment to creating the best personal assistant available.