Amazon’s initiative to profit from its Alexa-enabled devices appears to be falling short, reportedly costing the company over $25 billion from 2017 to 2021, as indicated by internal documents and sources familiar with the situation. Despite having hundreds of millions of customers, Amazon’s Echo speakers are primarily used for simple tasks such as setting alarms rather than encouraging shopping on the platform.
A former senior Amazon employee expressed concerns about the company’s decision to expand its workforce significantly while producing a device that is only functioning as a smart timer. In response to these challenges, Amazon’s CEO Andy Jassy is pursuing a solution, reportedly introducing a paid tier for the Alexa voice assistant. However, some engineers involved are skeptical about its potential effectiveness.
An Amazon spokesperson emphasized the company’s commitment to enhancing customer value and noted that its Devices & Services division has successfully established multiple profitable ventures.
In addition, Amazon’s latest version of Alexa, which is powered by artificial intelligence, is reportedly not yet prepared for launch, according to former employees. They claim the company lacks sufficient data and access to essential chips for the large language model that drives the new assistant. Furthermore, Amazon has allegedly shifted its focus from AI development for Alexa to generative AI for its cloud computing branch, Amazon Web Services.
Amazon has disputed these claims from former employees, asserting that they are misguided regarding the current status of its AI efforts. The company stated that its Artificial General Intelligence team has access to both proprietary Trainium chips and Nvidia GPUs and remains committed to creating the best personal assistant in the world.