Amazon’s initiative to profit from its Alexa-enabled devices has reportedly not succeeded, leading to a substantial financial loss for the company, amounting to over $25 billion between 2017 and 2021.
Despite claiming hundreds of millions of customers for its devices, the Echo speakers, which feature Alexa, are predominantly utilized for basic functions like setting alarms rather than shopping. Internal documents and sources familiar with the situation, as reported by the Wall Street Journal, shed light on these disappointing outcomes.
A former senior employee expressed concerns about the company’s hiring practices and the lack of effective functionality, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to these losses, CEO Andy Jassy is seeking solutions, including the introduction of a paid version of Alexa. However, some engineers have raised doubts about whether this initiative will yield significant results.
An Amazon spokesperson emphasized the company’s focus on creating value through its services beyond just device sales and mentioned that its Devices & Services organization has successfully generated profitable businesses.
On another note, the new AI-powered Alexa, unveiled in September, is reportedly far from completion. Former employees indicated that the company lacks sufficient data and access to the necessary chips for running its advanced language model. Additionally, Amazon has allegedly shifted its focus towards developing generative AI for its cloud service, Amazon Web Services, rather than prioritizing improvements to Alexa.
Amazon challenged the claims made by its former employees, asserting that its Artificial General Intelligence team has the required resources and remains dedicated to building a top-tier personal assistant.