Amazon’s strategy to generate revenue from its Alexa-enabled devices has reportedly resulted in significant financial losses, amounting to over $25 billion between 2017 and 2021, according to internal documents and sources familiar with the matter. Despite boasting hundreds of millions of users for its devices, many customers primarily use Alexa-enabled Echo speakers for tasks like setting alarms rather than for shopping on Amazon.
A former senior Amazon employee shared concerns with the Wall Street Journal, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these challenges, Amazon CEO Andy Jassy is seeking solutions, with plans to introduce a paid version of its voice assistant. However, some engineers involved in the development of this paid Alexa version have expressed doubts about its potential effectiveness.
An Amazon spokesperson commented, “We’re focused on the value we create when customers use our services, not just when they buy our devices,” emphasizing that the Devices & Services organization has successfully established profitable businesses and is poised for future growth.
In addition, Amazon’s newly introduced artificial intelligence-driven Alexa, which was showcased in September, is reportedly not in a position to be released, according to former employees. The company is said to lack sufficient data and access to the necessary chips to support the large language model that underpins the new version of its virtual assistant. Furthermore, it has shifted priority toward developing generative AI for its cloud services division, Amazon Web Services.
In response to critiques from former staff, Amazon maintained that such claims are inaccurate, asserting that the Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia graphics processing units. The company remains committed to its goal of “building the world’s best personal assistant.”