Amazon’s strategy to generate revenue from its Alexa-enabled devices has reportedly fallen short, resulting in substantial financial losses for the company, amounting to over $25 billion between 2017 and 2021. According to an article by the Wall Street Journal, which referenced internal documents and anonymous sources, the online retail giant’s Echo, Kindle, and other devices have not performed as expected. Many customers primarily use Echo speakers for setting alarms and accessing free applications rather than making purchases through Amazon.
A former senior Amazon employee expressed concerns about the efficiency of the investment, 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 reportedly seeking solutions, including the introduction of a paid tier for the Alexa voice assistant. However, engineers working on this new version are skeptical about its potential impact.
An Amazon spokesperson noted, “We are focused on the value we create when customers use our services, not just when they buy our devices.” The spokesperson also mentioned that the Devices & Services organization has established several profitable ventures for Amazon that are well-positioned for future success.
However, the development of Amazon’s new AI-powered Alexa, which was demonstrated in September, is reportedly facing significant hurdles. Former employees have indicated that the new version is not yet ready, lacking sufficient data and access to the necessary chips to support the large language model driving the assistant. Additionally, the company has deprioritized the AI version of Alexa to concentrate on generative AI developments within its cloud computing division, Amazon Web Services.
In response to these criticisms, Amazon stated that former employees are misinformed about its Alexa AI initiatives and affirmed that the Amazon Artificial General Intelligence team has access to both its proprietary Trainium chips and Nvidia graphics processing units. The company’s objective remains clear: to develop the world’s best personal assistant.