Amazon’s efforts to generate revenue through its Alexa-enabled devices have reportedly resulted in significant financial losses, totaling over $25 billion from 2017 to 2021. According to the Wall Street Journal, which cited internal documents and anonymous sources, the online retail giant’s losses stem from its Echo and Kindle products. Despite claiming hundreds of millions of customers, it appears that Echo speakers are primarily used for basic tasks like setting alarms rather than shopping on Amazon.
A former senior Amazon employee expressed concerns about the focus on hiring and developing features that may not resonate with users. In response to these challenges, Amazon CEO Andy Jassy is reportedly looking to implement a paid subscription model for Alexa. However, some engineers working on this project are skeptical about its potential effectiveness.
An Amazon spokesperson stated that the company is concentrating on the value it provides to customers, rather than just device sales. They highlighted that Amazon’s Devices & Services unit has established several profitable ventures and is optimistic about future growth.
Additionally, the company’s latest AI-powered Alexa, showcased in September, is said to be inadequately prepared, lacking sufficient data and access to the necessary chips for its advanced language model. Reports indicated that Amazon is shifting its focus towards generative AI for its cloud computing division, Amazon Web Services, rather than prioritizing advancements in Alexa.
In response to the claims from former employees, Amazon asserted that these assessments are mistaken and emphasized that its Artificial General Intelligence team has access to appropriate resources to develop Alexa into a leading personal assistant.