Amazon’s efforts to profit from its Alexa-enabled devices are reportedly falling short, leading to losses estimated at over $25 billion between 2017 and 2021. Internal documents and sources familiar with the situation revealed that despite having hundreds of millions of customers using devices like the Echo and Kindle, the Alexa-enabled Echo speakers are primarily employed for basic tasks such as setting alarms rather than driving shopping sales on Amazon.
A former senior Amazon employee expressed concerns, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer,” highlighting the disconnect between expectations and user behavior.
In response to these challenges, Amazon’s CEO, Andy Jassy, is seeking solutions, including the introduction of a paid tier for the voice assistant. However, engineers involved with this initiative have expressed skepticism about its potential impact.
An Amazon spokesperson emphasized the company’s focus on the overall value created through its services, rather than solely through device sales. They noted that the Devices & Services sector has cultivated several profitable ventures for the company and is poised to continue that trajectory.
Furthermore, reports indicate that Amazon’s latest AI-powered version of Alexa, showcased in September, is not yet fully developed. Concerns have been raised about a lack of sufficient data and access to the necessary chips for the advanced language model behind the new assistant. The company is said to have deprioritized Alexa’s AI development in favor of advancing generative AI for its cloud computing division, Amazon Web Services.
In response to these critiques, Amazon contended that their former employees are misinformed about the current status of Alexa’s AI developments, asserting that the Amazon Artificial General Intelligence team has access to required resources, including proprietary Trainium chips and Nvidia GPUs. The company’s commitment to creating the best personal assistant remains unchanged.