Amazon’s efforts to generate revenue from its Alexa-enabled devices have reportedly resulted in significant financial losses, amounting to over $25 billion from 2017 to 2021, according to the Wall Street Journal. This information comes from internal documents and sources close to the matter. Despite having hundreds of millions of customers using its devices, the primary functions of Alexa-enabled Echo speakers appear to be setting alarms and utilizing free applications, rather than driving purchases on Amazon.
A former senior employee expressed concerns about the investment of 10,000 hires leading to minimal functional benefits, describing the outcome as being akin to building a “smart timer.” In response to these challenges, Amazon CEO Andy Jassy is seeking solutions and is reportedly planning to introduce a subscription service for its voice assistant. However, some engineers are skeptical about this new paid version of Alexa making a meaningful impact.
An Amazon spokesperson emphasized the company’s commitment to delivering value through its services beyond just device sales, stating that the Devices & Services division has spawned various profitable enterprises and is poised for future success.
In addition, Amazon’s latest artificial intelligence-enhanced version of Alexa, showcased in September, is said to be far from complete. Former employees indicate that the company lacks sufficient data and access to the necessary chips for the large language model (LLM) that underpins this enhanced assistant. Furthermore, Amazon has reportedly shifted its focus toward developing generative AI for its cloud services, Amazon Web Services, rather than prioritizing AI advancements for Alexa.
In response to the critiques from former employees, Amazon asserts that these claims are inaccurate and that its Artificial General Intelligence team has access to required resources, including in-house Trainium chips and Nvidia GPUs. The company’s objective remains clear: to develop “the world’s best personal assistant.”