Back in 2016, Amazon's Echo voice-commanded speaker system, where the famous "Alexa" lived, was predicted to be a billion dollar business . And by 2017, Amazon was killing it with its Echos, which were the gadget to buy during the holiday season. But come early 2023, the Alexa-powered speakers were showing some confusing and even sales-pitchy issues .
So Amazon demonstrated a smarter, chattier Alexa last September, but didn't launch it publicly. Now, amid the current explosion of genuinely-impressive AI chatbots like ChatGPT , Alexa has begun to sound old-fashioned. A recent deep-dive by Fortune, which included interviews with over a dozen former Amazon employees, suggests why: Alexa had an early lead in the digital assistant market.
But as newer disruptive technologies arrived -- especially the new "large language model" (LLM) algorithms that drive chatbot tech -- Amazon struggled. This was due in part to Amazon's bureaucracy and disorganization, according to the employees interviewed. What happened with Alexa sounds like the famous innovator's dilemma crossed with the sunk cost fallacy and a litany of mis-steps by management.
Fortune reports that Amazon's Alexa team was "caught flat-footed by ChatGPT" when it was revealed in November 2022. Afterwards, various technology teams in Amazon "failed to coalesce around a unified plan" to improve Alexa compared its new rival. A big push to build an Alexa LLM was too vague, and the former employees interviewed said the project "lack.