Amazon’s strategy to generate revenue through its Alexa-enabled devices has reportedly resulted in significant losses for the company, totaling over $25 billion from 2017 to 2021, according to internal documents and sources acquainted with the situation. Despite having hundreds of millions of users for its devices, Amazon’s Echo speakers are primarily utilized for setting alarms and using free applications rather than for making purchases.
A former senior Amazon employee expressed concerns about the outcome of the company’s efforts, noting, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to the mounting losses, Amazon CEO Andy Jassy is exploring potential solutions, including the introduction of a paid tier for its voice assistant. However, some engineers working on this initiative are uncertain about its effectiveness.
An Amazon spokesperson emphasized the company’s focus on the value provided to customers beyond device sales, stating, “Our Devices & Services organization has established numerous profitable businesses for Amazon and is well-positioned to continue doing so.”
Additionally, the development of Amazon’s new AI-powered Alexa, showcased in September, is reportedly still far from completion, according to former employees. Concerns have been raised regarding insufficient data and the lack of necessary chips to support the advanced language model intended for the new version of Alexa. Furthermore, Amazon has reportedly shifted its priorities to enhance generative AI for its cloud computing division, Amazon Web Services.
In response to these claims, Amazon disputes the assertions made by former employees, arguing that they are misinformed about the current state of its Alexa AI projects. The company maintains that its Artificial General Intelligence team has access to essential resources, including its in-house Trainium chips and Nvidia GPUs, with the ongoing plan to develop “the world’s best personal assistant.”