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Amazon Alexa is a money loser as AI, NLU, and conversational teams heavily hit by layoffs


Following the developments earlier this week, there’s now more reporting on just how Amazon’s recent (and ongoing) layoffs have impacted Alexa.

According to Business Insider, those hardest-hit by the Amazon layoffs were Alexa teams working on AI systems, natural language understanding (NLU), and conversational abilities:

Amazon slashed headcount from multiple Alexa teams, including those working on making Alexa sound more like a human, acquire new skills and respond more creatively to questions.

In comparison, Google has spent the year working to make Assistant more natural as seen by how you can now look at a nearby Nest Hub Max and start a command, while some preset phrases (like “dim the lightsâ€) don’t have to be prefaced by “Hey Google.†Both those capabilities were announced at I/O 2022 in May to make Assistant more natural. 

An upcoming feature will let Assistant ignore “umm,†interruptions, natural pauses, and other self-corrections. At the moment, Google’s voice assistant is very literal and will just accept what it hears. Google expects to launch these natural conversation speech models in early 2023:

To make this happen, we’re building new, more powerful speech and language models that can understand the nuances of human speech — like when someone is pausing, but not finished speaking.

That said, Assistant’s 2022 (and 2021) has been characterized by a slower rate of new features. The addition of expanded podcast search commands was notable earlier this week, while the other big effort this year is putting the Google Assistant and Smart Display experience on the Pixel Tablet for 2023.

In another report, Business Insider says most Alexa commands are trivial like asking about the weather or playing music. Despite “getting a billion interactions per week,†they can’t be monetized by Amazon. Meanwhile, third-parties weren’t able to “generate engagement†with other voice apps/experiences, which mimics the craze and fall of “chatbots.â€

This year, an employee familiar with the hardware team said the company is on pace to lose around $10 billion on Alexa and other devices. 

Meanwhile, Insider Intelligence market research says that “Assistant currently leads with 81.5 million users, followed by Apple Siri’s 77.6 million†in the US, while Alexa is “third largest with 71.6 million.†One key consideration is that Apple and Google have a much broader phone user base that’s not limited to smart home devices. 

When asked for comment by Insider, Amazon said that it’s “committed as ever to Echo and Alexa, and will continue to invest heavily in them.â€

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