Amazon’s ambitions to profit from its Alexa-enabled devices have reportedly resulted in significant financial losses, amounting to over $25 billion from 2017 to 2021, according to internal documents and insiders cited by the Wall Street Journal. Despite boasting hundreds of millions of customers for its devices, many users primarily utilize Alexa-enabled Echo speakers for basic tasks like setting alarms, rather than making purchases on Amazon.
A former senior employee highlighted the company’s hiring of 10,000 individuals to create what was essentially a smart timer, reflecting concerns about its effectiveness.
In response to these challenges, Amazon CEO Andy Jassy is seeking solutions and is allegedly preparing to introduce a paid version of its voice assistant. However, some engineers working on this initiative are skeptical about its potential impact.
An Amazon spokesperson emphasized that the company prioritizes the value created for customers through its services, not solely device sales. They asserted that the Devices & Services organization has developed several profitable ventures for Amazon and is positioned to continue this trend.
On the technology front, Amazon’s newly introduced AI-powered Alexa, which was showcased in September, is reportedly not yet ready, according to former employees. The company faces challenges with data availability and access to essential chips necessary for running its new large language model. Furthermore, it has shifted focus towards generative AI for its Amazon Web Services cloud computing segment, deprioritizing the development of AI-powered Alexa.
In response to the concerns raised by former staff, Amazon stated that these individuals are misinformed about the current status of its Alexa AI projects and confirmed that the Amazon Artificial General Intelligence team has access to both its proprietary Trainium chips and Nvidia GPUs. The company reiterated its commitment to its goal of developing the world’s best personal assistant.