Amazon’s attempts to profit from its Alexa-enabled devices have reportedly resulted in significant financial losses, amounting to over $25 billion from 2017 to 2021. Internal documents and anonymous sources cited by the Wall Street Journal highlight that despite boasting hundreds of millions of customers, many users primarily utilize Echo speakers for simple tasks such as setting alarms, rather than for shopping.
A former senior employee expressed concern over the company’s hiring spree, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to the losses, Amazon’s CEO Andy Jassy is seeking solutions, including the introduction of a paid tier for Alexa. However, some engineers are skeptical about the potential effectiveness of this new model.
An Amazon spokesperson emphasized the company’s focus on the value created through customer engagement with its services, rather than solely through device sales, asserting that their Devices & Services segment continues to establish profitable ventures.
In addition, the company has faced challenges with its newly announced AI-enhanced Alexa, which reportedly is not ready for deployment due to insufficient data and the necessary technology. Former employees indicated that Amazon has shifted its priorities towards developing generative AI solutions for its cloud computing division, Amazon Web Services.
In response, Amazon refuted claims from its former staff, stating that the Amazon Artificial General Intelligence team has access to the required resources and remains dedicated to creating the best personal assistant possible.