The Folly of Alexa: Amazon’s $25 Billion Waste of Money
Amazon’s vaunted Alexa smart speaker division has been bleeding money for years, with a staggering $25 billion in losses between 2017 and 2021. And it’s not just a drop in the bucket – the Alexa division alone reportedly lost a whopping $10 billion in 2022. The writing was on the wall: a loss leader that was no longer generating sufficient returns to justify the investment.
But the worst part? Amazon’s attempt to justify the losses was to claim that Alexa was all about “conversational AI” and “generative” potential. In other words, they were saying that the losses were worth it because Alexa was “evolving” and would one day be able to have “natural” conversations with humans. How quaint. And how utterly delusional.
Let’s be real: Alexa has never lived up to its hype. A whopping 60% of queries are just simple tasks like playing music, controlling lights, and setting timers. Is that what we’re talking about when we say “generative AI”? It’s like claiming that a Roomba is the same thing as a self-aware artificial intelligence because it can navigate a room.
And yet, Amazon is doubling down on Alexa, pouring billions more into the failed project. Why? Because they think that generative AI will somehow magically make Alexa useful. Newsflash: it won’t. ChatGPT has shown us that natural language processing can be incredibly powerful, but Alexa is no ChatGPT.
The future of Alexa is bleak, folks. It’s a relic of a bygone era, a reminder of Amazon’s misguided attempts to dominate the smart speaker market. But hey, at least we can all look forward to the 10,000-person timer problem being replaced with the 10,000-person “I told you so” problem.
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