OpenAI's first hardware device might be exactly the kind of costly side quest it can't afford

[Natalie91]

Engadget's Igor Bonifacic points out an awkward contradiction, former OpenAI executive Fidji Simo warned employees this spring the company risked missing its moment by getting distracted by costly side quests like Sora, which OpenAI shut down in April. Weeks later, Bloomberg reported OpenAI's debut hardware product will be a humanlike, rechargeable smart speaker, precisely the kind of side project Simo was warning against

The timing is rough given where the smart speaker market actually stands. IDC's Jitesh Ubrani says shipment volume has fallen from over 100 million units in 2022 down to the tens of millions today, declining 16.3 percent in 2023 and another 11.8 percent the year after, with the 2025 introduction of Alexa+ only slightly slowing the bleeding rather than reversing it. Ubrani's read on why is simple, most people aren't upgrading because the features that matter are cloud based, and use cases stay limited to music, podcasts and timers regardless of how smart the underlying assistant gets

Bloomberg describes OpenAI's device as including a camera and sensors for understanding its surroundings, a rechargeable battery, and mechanical elements that can move on their own, a considerably more complex and expensive proposition than a $100 Echo Dot. Ubrani notes smart speakers have never been treated as a premium category, and many buyers would balk at a $300 price point regardless of features

Amazon's own history with Alexa is a cautionary tale here. As of 2022, Business Insider reported Amazon had failed to find a way to make money from Alexa interactions themselves, with its Worldwide Digital unit posting a $3 billion operating loss in a single quarter, the vast majority tied to the assistant. Ubrani still sees a rationale for OpenAI trying anyway, arguing AI can't stay locked in a browser to be truly useful, and hardware is genuinely one of the least resistance ways to start, cheaper than building a phone or smart glasses given the supply chain and carrier certification hurdles those categories involve. But between Meta's own Portal displays getting killed off in 2022 alongside 11,000 layoffs, and OpenAI's own reported losses of $5.09 billion in 2024 and $38.5 billion in 2025 with profitability not expected until at least 2030, a smart speaker is unlikely to be what turns the company's finances around

Smart speakers could help OpenAI lose even more money - Engadgetwww.engadget.com

[Candle28]

The Fidji Simo warning about side quests landing right before this exact hardware leak is such a pointed bit of irony, almost feels like the story wrote itself

[NatureBoyRyan65]

Amazon losing 3 billion dollars in a single quarter on Alexa specifically, with the vast majority tied to the assistant itself, is a sobering precedent for anyone thinking a smart speaker is an easy way to make money

[StevenArroyo]

Ubrani's point about hardware being the path of least resistance compared to a phone or smart glasses is fair, but least resistance still isn't the same as likely to succeed given how saturated this category already is