Amazon’s attempt to generate revenue from its Alexa-enabled devices has reportedly resulted in significant financial losses, totaling over $25 billion from 2017 to 2021, according to the Wall Street Journal. Internal documents and unnamed sources indicate that while Amazon boasts hundreds of millions of users for its devices, most interactions with the Alexa-enabled Echo speakers involve setting alarms and using free applications, rather than making purchases on Amazon.
A former senior employee expressed concern regarding the investment in personnel and resources, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these challenges, CEO Andy Jassy is reportedly exploring solutions, including the introduction of a paid version of the voice assistant. However, some engineers are skeptical about the potential success of this new offering.
An Amazon spokesperson highlighted that the company prioritizes the value created for customers through their services, not just device sales. They emphasized the establishment of profitable businesses within the Devices & Services organization.
On another front, Amazon’s new AI-driven version of Alexa, which was showcased in September, is reportedly not ready for deployment. Former employees noted that the company lacks sufficient data and access to the necessary chips for the large language model that powers the new assistant. Furthermore, Amazon has shifted focus toward developing generative AI for its cloud computing division, Amazon Web Services, rather than advancing the AI-powered Alexa.
Amazon refuted claims made by former employees, asserting that they are misinformed about the current AI initiatives and that the company has access to both in-house Trainium chips and Nvidia GPUs. According to Amazon, the goal for Alexa remains unchanged: to create the world’s best personal assistant.