Amazon’s strategy to generate revenue through its Alexa-enabled devices has reportedly failed, leading to losses exceeding $25 billion between 2017 and 2021. Internal documents and sources familiar with the situation, as reported by the Wall Street Journal, indicate that while Amazon has developed a large customer base for its devices like Echo and Kindle, users primarily utilize these gadgets for basic functions such as setting alarms rather than for making purchases on Amazon.
A former senior Amazon employee expressed concern by 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 attempting to revitalize the Alexa platform through the introduction of a paid version of the voice assistant. However, some engineers involved in this project have expressed doubts about its potential impact.
An Amazon spokesperson emphasized the company’s focus on creating value through its services, stating that their Devices & Services organization has successfully established profitable ventures and is poised for continued success.
On another front, the newly announced AI-powered Alexa, which was demonstrated in September, is said to be far from completion. Former employees indicated that Amazon lacks sufficient data and access to the necessary chips required for the advanced large language model that underpins the new version of the assistant. Reports suggest that Amazon has deprioritized this AI development to concentrate on generative AI advancements for its cloud computing branch, Amazon Web Services.
In response to these concerns, Amazon has disputed the claims of its former staff, asserting that the Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia graphics processing units (GPUs). The company’s commitment to developing the world’s best personal assistant remains unchanged, according to their statements.