Amazon’s efforts to monetize its Alexa-enabled devices have reportedly resulted in significant financial losses, amounting to over $25 billion from 2017 to 2021, according to internal documents and sources familiar with the situation. Despite having hundreds of millions of customers using devices like Echo and Kindle, it appears that these products are primarily utilized for basic functions such as setting alarms rather than facilitating shopping on Amazon.
A former senior employee expressed concerns, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” As Amazon CEO Andy Jassy seeks solutions, the company is reportedly considering introducing a paid tier for its voice assistant. However, some engineers involved in the project are apprehensive about its potential effectiveness.
An Amazon spokesperson emphasized the company’s commitment to creating value for customers beyond the sale of devices, noting that its Devices & Services division has successfully established several profitable ventures and is poised for future growth.
In another development, the new AI-enhanced version of Alexa demoed in September is reportedly far from completion, according to former employees. Challenges include insufficient data and a lack of access to the necessary chips for operating the large language model that underpins the updated assistant. Additionally, Amazon has reportedly shifted its focus toward developing generative AI for its cloud computing platform, Amazon Web Services.
In response, Amazon stated that claims from former employees regarding their AI projects are incorrect and that the company’s Artificial General Intelligence team has access to in-house Trainium chips and Nvidia GPUs. Amazon reiterated its commitment to developing what it aims to be the world’s best personal assistant.