Amazon’s strategy to profit from its Alexa-enabled devices has reportedly resulted in significant financial losses for the company, amounting to over $25 billion between 2017 and 2021, according to the Wall Street Journal, which cites internal documents and anonymous sources. Although Amazon boasts hundreds of millions of customers for its devices, its Echo speakers, which utilize the Alexa voice assistant, are predominantly used for simple tasks like setting alarms rather than driving sales on Amazon.
Concerns about this trend have surfaced within the company, with a former senior Amazon employee expressing doubt about the team’s efforts, mentioning their investment in a large workforce for what they referred to as a “smart timer.”
In response to these challenges, Amazon’s CEO Andy Jassy is reportedly working on a solution, including the introduction of a paid version of Alexa. However, some engineers tasked with developing this version are skeptical about its potential impact.
An Amazon spokesperson emphasized the company’s commitment to creating value through its services beyond just device sales. They noted that the Devices & Services division has successfully launched various profitable ventures and is poised to continue doing so.
Furthermore, the development of Amazon’s new AI-enhanced Alexa, showcased in September, is reportedly lagging. Former employees claim the company lacks sufficient data and necessary hardware to support the advanced language model driving this update. According to reports, Amazon has shifted its focus towards enhancing generative AI for its cloud computing division, Amazon Web Services.
In response to these claims, Amazon contended that the information provided by former employees is inaccurate. The company stated that its Artificial General Intelligence team has access to both proprietary Trainium chips and Nvidia GPUs, asserting that their objective remains to create the world’s premier personal assistant.