Amazon’s attempts to profit from its Alexa-enabled devices have reportedly resulted in significant losses for the company, totaling over $25 billion from 2017 to 2021, as per a report by the Wall Street Journal. Internal documents and sources indicate that while Amazon has gained hundreds of millions of users for its devices such as Echo and Kindle, the primary usage of these products leans towards functions like setting alarms and using free applications, rather than making purchases through Amazon.
A former senior employee expressed concerns, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these challenges, CEO Andy Jassy is pursuing a solution, including the potential introduction of a paid subscription model for the voice assistant. However, some engineers reportedly doubt the effectiveness of this new approach.
An Amazon spokesperson emphasized the company’s focus on the value created when customers use its services, rather than solely on device sales. They noted that Amazon’s Devices & Services sector has developed numerous successful businesses and remains optimistic about future growth.
In other developments, Amazon’s latest AI-enhanced version of Alexa, unveiled in September, is reportedly not yet prepared for a full launch. Insiders claim that the company lacks sufficient data and necessary processing power for the new large language model. Moreover, Amazon may be shifting its focus toward generative AI for its cloud services, rather than prioritizing the new AI-powered Alexa.
Amazon contended that claims from former employees about its AI capabilities are inaccurate, asserting that the Amazon Artificial General Intelligence team has access to both its own Trainium chips and Nvidia GPUs. The company reiterated its commitment to building “the world’s best personal assistant.”