Amazon’s strategy to generate revenue from its Alexa-enabled devices has not materialized as hoped, with reports indicating the company has incurred losses amounting to over $25 billion between 2017 and 2021. This information comes from internal documents and sources familiar with the situation, according to the Wall Street Journal. Despite Amazon having hundreds of millions of users for its devices, the primary functions of the Alexa-enabled Echo speakers appear to revolve around simple tasks like setting alarms, rather than facilitating shopping on Amazon.
A former senior employee expressed concern about the outcomes of the company’s investment, saying, “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 pursuing solutions, including the potential introduction of a paid version of Alexa. However, some engineers involved in the development of this upgraded Alexa are skeptical about its ability to drive profitability.
An Amazon representative stated, “Our Devices & Services organization has established numerous profitable businesses for Amazon and is well-positioned to continue doing so going forward.” The company emphasizes its focus on value creation through its services rather than solely through device sales.
Meanwhile, reports suggest that Amazon’s new AI-enhanced version of Alexa, which was demonstrated in September, is far from ready. Concerns have been raised by former employees regarding the company’s lack of sufficient data and necessary hardware to support the advanced language model that underpins this new assistant. It is also noted that Amazon has shifted its priorities toward developing generative AI technologies for its cloud services division, Amazon Web Services.
In response to these claims, Amazon refuted the accuracy of the former employees’ assessments, asserting that its Artificial General Intelligence team has access to the required Trainium chips and Nvidia GPUs, and reaffirming its commitment to creating the best personal assistant available.