Amazon’s strategy to generate revenue through its Alexa-enabled devices has reportedly resulted in significant financial losses for the company, amounting to over $25 billion from 2017 to 2021, according to the Wall Street Journal. Internal documents and insights from unnamed sources indicate that despite having hundreds of millions of customers, the Amazon Echo speakers are primarily used for setting alarms and other non-commercial functions, rather than for shopping.
A former senior employee expressed concerns about the hiring of thousands of personnel, stating that they had essentially created a “smart timer.” In response to these challenges, Amazon’s CEO Andy Jassy is reportedly exploring the launch of a paid subscription tier for Alexa. However, some engineers involved in the project have voiced skepticism regarding its potential impact.
An Amazon spokesperson emphasized the company’s commitment to delivering value through its services rather than merely focusing on device sales. They noted that the Devices & Services division has successfully established various profitable ventures for Amazon and is positioned to sustain this momentum.
On another front, Amazon’s newly designed AI-enhanced Alexa, showcased in September, appears to be facing significant developmental hurdles. Former employees mentioned that the company lacks sufficient data and the necessary chips to fully support the advanced language model (LLM) intended for the assistant. Moreover, it has reportedly shifted priorities to concentrate on generative AI for its cloud computing segment, Amazon Web Services.
In response to criticisms from former staff, Amazon asserted that these claims are inaccurate and that the team working on Amazon’s Artificial General Intelligence has access to both in-house chips and Nvidia GPUs. The company reaffirms its objective of creating the world’s leading personal assistant.