Amazon’s initiative to generate revenue through its Alexa-enabled devices has reportedly resulted in significant financial losses for the company, amounting to over $25 billion between 2017 and 2021. This information comes from the Wall Street Journal, which referenced internal documents and insights from unnamed sources. While Amazon boasts hundreds of millions of customers for its various devices, its Echo smart speakers, which utilize Alexa, are primarily employed for basic functions like setting alarms rather than shopping activities.
A former senior employee expressed concerns about the company’s direction, noting that despite hiring 10,000 staff, the outcome was the development of a simple smart timer. In response to these challenges, CEO Andy Jassy is reportedly working on introducing a paid version of the Alexa voice assistant. However, some engineers are skeptical, believing that the paid tier will not significantly impact the overall situation.
An Amazon spokesperson emphasized the company’s focus on delivering value through its services, rather than just device sales. They pointed out that the Devices & Services division has successfully created profitable ventures and is positioned to continue that trend.
In addition, Amazon’s new AI-powered Alexa, showcased in September, is allegedly far from completion, according to some former employees. They cited insufficient data and a lack of access to the necessary chips for the advanced language model driving the new version. Furthermore, Amazon may have shifted priorities toward developing generative AI for its cloud computing service, Amazon Web Services, which has caused delays in the AI-enhanced Alexa project.
However, Amazon contends that former employees are mistaken about its AI capabilities, stating that the Amazon Artificial General Intelligence team has access to both proprietary Trainium chips and Nvidia GPUs. The company’s commitment to creating the world’s leading personal assistant remains steadfast, according to official statements.