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When Amazon.com Inc executives took the stage last month in New York to announce an artificially intelligent Alexa, there was a conspicuous absence: no flashy new gadget to accompany the souped-up voice assistant. Amazon isn’t unusual in this regard.
After a years-long explosion of high-end laptops, foldable smart phones and voice-activated everything, big tech companies have entered the artificial intelligence age with little new hardware. If the gadget development scene isn’t entirely dead, "it’s napping,” said Liam Pingree, an engineer with a doctorate in materials science who led teams at Amazon, Microsoft Corp and Boeing Co. Pingree and other hardware veterans decry a lack of risk-taking in hardware as tech companies pour billions of dollars into massive bets on artificial intelligence software.
The industry is banking on a future where AI tools create novel sources of revenue, and, if history is any guide, new products can fuel customer adoption. Smartphones created an app ecosystem, and the personal computer helped popularise the Internet. But nobody has worked out what role purpose-built gadgets will play for AI.
People tend to interact with the technology using comparatively old equipment, such as a ChatGPT window in a laptop browser tab or an AI-infused search query spoken into a phone mic. The most ambitious effort to create an AI-focused product – a wearable pin from Humane Inc that promised to liberate people from their smartphone screens – flopped. The startup sold itself to PC maker HP Inc in February.
The hardware bust has hit Seattle especially hard. Only recently the city’s two multi-trillion-dollar technology behemoths were spending prodigiously on innovative gadgets. But both Amazon and Microsoft cut workers in their hardware units as part of broad, industrywide layoffs that started in late 2022.
Mechanical and electrical engineers, product managers and marketers say that more than two years later, the local hardware scene hasn’t recovered. Job postings seeking computer hardware engineers in the Seattle metro area this winter were the lowest in any three-month stretch since 2017, according to data from Lightcast, a labour analytics firm. That has implications for the underemployed product designers eager to work on moonshots, for the cottage industry of industrial design firms and prototyping shops that grew up in the shadow of big engineering projects.
If the slump persists, it could drain these companies of the next generation of engineers required to create new or interesting products down the line. "The dollars and bandwidth and innovation are going toward AI, which doesn’t go into devices well right now,” said Beau Oyler, a product designer who has worked with the likes of Amazon, LG and Samsung. A firm he founded, Enlisted Design, has cut staff in recent years, in part owing to a dropoff in business from consumer electronics outfits.
"It’s a bloodbath out there." Seattle has long been a business-software town because it hosts the headquarters of Microsoft and Amazon’s cloud-computing unit. But about a decade ago, the area became an unlikely hotbed for skunkworks engineering products aimed at reinventing how people use computers.
In the fall of 2014, Amazon unveiled Alexa and its first Echo smart speaker. Over the next five years, Amazon brought almost 60 Echo devices and related gadgets to market, projects that employed thousands of people at Amazon, and thousands more at contract manufacturing firms and their suppliers. At around the same time, Microsoft introduced HoloLens, an augmented reality headset that placed images in the wearer’s field of vision.
The company, based in Redmond, a Seattle suburb, started pouring money into an increasingly high-end Surface PC lineup. In the end, Amazon sold millions of devices but failed to build a lucrative business model to fund that experimentation. When Andy Jassy started cutting costs about a year into his tenure as Amazon chief executive officer, the first major layoffs fell on the devices unit.
Executives have said Amazon will continue to invest in hardware, albeit in a narrower range of devices. "We are taking a very intentional view of our hardware roadmaps and what’s the best, highest-value hardware we can deliver for customers," Daniel Rausch, an Amazon vice president and the head of the Echo and Alexa product lines, said in a recent interview. Pingree, whose projects at Amazon included autonomous warehouse robots and drones, left the company in 2022 when it became clear to him that executives didn’t want to back the type of ambitious engineering programs he wanted to work on.
He joined Microsoft to lead a group of HoloLens engineers, only to find himself charged with helping to dismantle the team as the company curbed its ambitions for the device. After doing some consulting and startup work, he’s back at Boeing, where he started his career 17 years ago, working under another Microsoft alum. "This region had really built a strong, collaborative, entrepreneurial kind of engineering base,” Pingree said.
"And that’s not sought-after at the moment.” Microsoft last month rid itself of HoloLens, selling its interest in a US Army testing program to Anduril Industries Inc, a defence contracting startup. About 250 of the roughly 350 people on the project took jobs at Anduril, according to a person familiar with the matter.
Another 50 or so were reassigned at Microsoft, and a similar number were laid off, the person said. "You’ve got these pockets of drones and military and defense hardware,” said Stacy Saal, who runs Jelly Collective, a startup incubation studio, and spent several years at Amazon. "But I don’t know anybody that is pushing deep and hard into consumer hardware right now.
” Some hardware engineers, in Seattle as around the US, pin their hopes on commercial space ventures, as tech billionaires and millionaires set out to build rocket engines and constellations of satellites. Amazon’s Project Kuiper satellite internet initiative last week had more than 500 open jobs, the company’s job board showed, dwarfing 69 listings for hardware engineers in the consumer electronics division. But the space business isn’t immune to cuts.
Blue Origin, Amazon founder Jeff Bezos’s rocket venture, announced layoffs last month. Executives say AI hardware is coming, though it’s not clear whether that will manifest as tweaks to existing products - like smartphones, deskside smart speakers or earbuds -or another swing at a Humane-style device. Other companies are trying to use advances in large language models to make useful humanoid robots.
Over the course of about 70 minutes last month inside a Manhattan event space, Amazon devices chief Panos Panay and other executives interacted with the new Alexa using a 21-inch Echo Show. The device, released last fall, was a relatively recent arrival. But the basic setup - a touchscreen packaged with sets of microphones and speakers - looks and functions much the same as when the company introduced its first such device in 2017.
In an interview after the event, Panay said there’s "an entirely new wave of hardware” coming - without describing the product roadmap. – Bloomberg.
