Amazon’s efforts to generate revenue through its Alexa-enabled devices have reportedly resulted in significant losses, amounting to over $25 billion from 2017 to 2021. According to the Wall Street Journal, internal documents and sources familiar with the situation reveal that while Amazon has attracted hundreds of millions of customers for its devices, these gadgets are primarily used for basic functions such as setting alarms rather than for shopping on Amazon.
A former senior Amazon employee expressed concerns about the company’s hiring and development strategy, suggesting that despite investing heavily in staffing, the outcome has been underwhelming, likening it to creating a “smart timer.”
In response, Amazon CEO Andy Jassy is exploring solutions and is reportedly set to introduce a paid version of its voice assistant. However, some engineers involved in the project are skeptical about its potential impact.
In a statement, an Amazon spokesperson emphasized the company’s focus on delivering value through its services beyond just device sales. They highlighted that the Devices & Services division has successfully created multiple profitable ventures and is poised for continued success.
Meanwhile, former employees have raised issues regarding the development of Amazon’s new AI-powered Alexa, which was demonstrated in September. They claim the technology is not yet ready due to a lack of sufficient data and the necessary chips for the large language model that powers it. Reports also indicate that Amazon is shifting its focus towards generative AI within its cloud computing sector, Amazon Web Services, rather than on enhancing Alexa.
Amazon has countered these criticisms, asserting that its former employees are misinformed and that the Amazon Artificial General Intelligence team has access to the required resources, including in-house Trainium chips and Nvidia GPUs. The company’s long-term goal, they reaffirmed, remains to create the world’s leading personal assistant.