Amazon’s attempts to profit from its Alexa-enabled devices have not yielded positive results, as the company has reportedly incurred losses exceeding $25 billion from products like Echo and Kindle between 2017 and 2021. According to internal documents and sources familiar with the situation, the online retail giant has faced challenges in converting its extensive customer base into paying users, with many using the devices primarily for basic functions like setting alarms rather than for shopping.
A former senior employee expressed concerns about the company’s investment in personnel and technology, 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, including the introduction of a paid version of its voice assistant. However, some engineers working on this new tier have reservations about its potential effectiveness, according to reports.
An Amazon spokesperson emphasized the company’s commitment to providing value beyond device sales, highlighting that the Devices & Services division has successfully established various profitable ventures and is positioned for future success.
Additionally, concerns have emerged regarding the readiness of Amazon’s new AI-enhanced Alexa, which was demonstrated in September. Former employees claim that the company lacks sufficient data and access to the necessary chips to effectively run the large language model that underpins the updated assistant. Furthermore, reports suggest that Amazon has shifted its focus away from the AI-powered Alexa to concentrate on generative AI advancements for its cloud computing unit, Amazon Web Services.
In response to these allegations, Amazon contended that its former employees are misinformed about its ongoing AI initiatives and confirmed that the Amazon Artificial General Intelligence team has access to both proprietary Trainium chips and Nvidia GPUs. The company maintains that its objective remains to develop the world’s best personal assistant.