Amazon’s efforts to generate revenue from its Alexa-enabled devices have reportedly resulted in significant financial losses, amounting to over $25 billion from 2017 to 2021. This information comes from internal documents and sources familiar with the situation, according to the Wall Street Journal. Despite having hundreds of millions of customers using its devices, many users primarily utilize the Alexa-enabled Echo speakers for basic functions like setting alarms rather than for shopping on Amazon.
A former senior Amazon employee expressed concern, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these challenges, Amazon’s CEO Andy Jassy is seeking solutions and is said to be launching a paid tier of its voice assistant. However, there are concerns among engineers about the potential effectiveness of this new paid version.
An Amazon spokesperson noted, “We’re focused on the value we create when customers use our services, not just when they buy our devices,” adding that the Devices & Services organization has established several profitable ventures for the company and is poised for continued success.
In addition, Amazon’s newly announced AI-powered version of Alexa, revealed in September, is reportedly not ready for deployment. Former employees indicate that Amazon lacks sufficient data and access to the necessary chips to support the advanced AI model intended for the updated assistant. The company has also shifted priority away from the AI Alexa to concentrate on generative AI developments for its cloud computing division, Amazon Web Services.
In response to these criticisms, Amazon has stated that its former employees are misinformed regarding its current AI initiatives. The company claims that its Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs, reiterating its commitment to creating “the world’s best personal assistant.”