Amazon’s initiative to generate revenue from its Alexa-enabled devices has reportedly led to significant financial losses, amounting to over $25 billion between 2017 and 2021. This information comes from internal documents and sources familiar with the situation, as reported by the Wall Street Journal. Despite boasting hundreds of millions of customers using their devices, it seems that most use the Alexa-enabled Echo speakers primarily for setting alarms and utilizing free applications rather than making purchases through Amazon.
A former senior employee expressed concern over the hiring of 10,000 staff members for what seems to be a limited function, remarking, “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 version of the voice assistant. However, some engineers involved in the project are skeptical about its potential impact, suggesting it may not significantly change the current situation.
An Amazon spokesperson stated, “We are focused on the value we create when customers use our services, not just when they buy our devices,” adding that the Devices & Services segment has established multiple profitable ventures for the company and is well-positioned for future success.
On a related note, reports indicate that Amazon’s new AI-powered version of Alexa, showcased in September, is still far from completion. According to former employees, the company lacks sufficient data and necessary chips to support the large language model driving this updated virtual assistant. Additionally, it is said that Amazon has shifted its priorities to concentrate on generative AI for its cloud division, Amazon Web Services.
Amazon has responded to these claims, asserting that its former employees are misinformed about the progress of its Alexa AI initiatives, and that the Amazon Artificial General Intelligence team has access to both its proprietary Trainium chips and Nvidia graphics processing units (GPUs). The company’s objective for Alexa remains unchanged: to create the world’s best personal assistant.