Amazon’s efforts to profit from its Alexa-enabled devices have reportedly resulted in substantial losses for the company, amounting to over $25 billion from 2017 to 2021. According to a report by the Wall Street Journal, which references internal documents and sources familiar with the situation, while Amazon boasts hundreds of millions of customers using its devices, many utilize Alexa primarily for basic tasks such as setting alarms instead of shopping.
In response to these challenges, CEO Andy Jassy is seeking solutions, including the introduction of a paid subscription tier for Alexa. However, some engineers involved in the project have expressed doubts about its potential impact.
An Amazon spokesperson stated, “We’re focused on the value we create when customers use our services, not just when they buy our devices.” They emphasized that Amazon’s Devices & Services division has successfully established profitable ventures and is positioned to continue that trend.
Amid these developments, the new AI-enhanced version of Alexa demonstrated in September is reportedly still in the early stages, with former employees claiming the company lacks sufficient data and access to the necessary chips to support the advanced language model. Furthermore, it has been suggested that Amazon is prioritizing generative AI capabilities for its cloud computing service, Amazon Web Services, over its AI-powered Alexa project.
In response to these concerns, Amazon has asserted that former employees are mistaken regarding its Alexa AI initiatives, stating that the Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs. The company maintains its goal of creating “the world’s best personal assistant.”