Amazon’s attempt to generate profit from its Alexa-enabled devices has reportedly resulted in significant financial setbacks, with losses exceeding $25 billion between 2017 and 2021. Internal documents and sources familiar with the situation have revealed that, despite having hundreds of millions of customers using devices like Echo and Kindle, Alexa is primarily utilized for basic functions, such as setting alarms, rather than for making purchases on Amazon.
Concerns were raised by a former senior Amazon employee, who commented, “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 exploring solutions, including the introduction of a paid tier for the voice assistant Alexa. However, some engineers involved in the development of this paid version express skepticism about its potential impact.
An Amazon spokesperson emphasized the company’s emphasis on the value created through service usage, stating that their Devices & Services organization has established multiple profitable ventures and is well-positioned for future success.
On another front, the new AI-driven version of Alexa, showcased in September, is reportedly not yet prepared for deployment. According to former employees, Amazon lacks sufficient data and access to the necessary chips to support the advanced language model for the upgraded assistant. Additionally, it appears that the company has shifted focus toward enhancing generative AI for its cloud sector, Amazon Web Services.
In response to these claims, Amazon maintains that its former employees are misinformed regarding the current state of Alexa’s AI development, asserting that the Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia graphics processing units. The company’s commitment to creating “the world’s best personal assistant” remains unchanged.