Amazon’s efforts to profit from its Alexa-enabled devices have reportedly resulted in significant financial losses, with estimates indicating the company lost over $25 billion from 2017 to 2021, according to the Wall Street Journal. This figure draws from internal documents and insights from sources familiar with the situation.
Despite boasting hundreds of millions of customers using devices like the Echo and Kindle, the primary functions of these Alexa-enabled speakers revolve around basic tasks such as setting alarms rather than facilitating shopping on Amazon. A former senior employee expressed concerns over the investment in new hires and technology that simply functioned as “a smart timer.”
In response to these challenges, Amazon CEO Andy Jassy is reportedly working on a solution that includes launching a paid version of its voice assistant. However, some engineers fear that this new tier may not significantly impact the current state of Alexa’s profitability.
An Amazon spokesperson emphasized that the company’s focus lies in the overall value provided to customers beyond merely selling devices, highlighting the successful establishment of various profitable ventures within its Devices & Services organization.
In addition, reports suggest that Amazon’s latest AI-powered version of Alexa, showcased in a demo in September, is still far from completion. Former employees noted that the company lacks sufficient data and access to the necessary chips for the large language model that will drive the new assistant. Furthermore, it appears the company has shifted its priorities away from Alexa to concentrate on generative AI development for its cloud computing arm, Amazon Web Services.
Amazon has countered these claims, asserting that former employees are misinformed about the company’s current AI initiatives. The company stated that its Artificial General Intelligence team has the required resources, including in-house Trainium chips and Nvidia GPUs, and reaffirmed its commitment to creating the best personal assistant in the market.