Amazon’s strategy to generate revenue from its Alexa-enabled devices has reportedly resulted in significant financial losses, amounting to over $25 billion from 2017 to 2021, according to the Wall Street Journal, which cited internal documents and sources close to the situation. Although Amazon boasts hundreds of millions of customers, it seems that users primarily utilize the Alexa-enabled Echo speakers for basic tasks such as setting alarms, rather than for shopping.
A former senior employee expressed concern about the company’s hiring practices and product development, noting the inefficiencies in their efforts. In light of these challenges, Amazon CEO Andy Jassy is exploring solutions, including the introduction of a paid version of the voice assistant. However, some engineers involved in this initiative are skeptical about its potential impact.
An Amazon spokesperson emphasized that the company focuses on the overall value created for customers using its services, rather than solely on device sales, citing the success of its Devices & Services organization.
In addition, reports indicate that Amazon’s upcoming AI-enhanced version of Alexa is not yet ready for launch due to insufficient data and limited access to the required processing chips. The company is reportedly prioritizing the development of generative AI for its cloud services rather than advancing the new Alexa model.
Amazon has contested claims from former employees, asserting that its Artificial General Intelligence team has adequate access to the necessary resources, including proprietary chips and Nvidia GPUs. The company reiterated its commitment to creating “the world’s best personal assistant” with its Alexa platform.