Amazon’s strategy to generate revenue through its Alexa-enabled devices appears to have been unsuccessful, with reports indicating that the company has incurred losses exceeding $25 billion since 2017.
According to the Wall Street Journal, internal documents reveal that despite having hundreds of millions of customers using its devices, the Alexa-powered Echo speakers are primarily utilized for setting alarms and utilizing free applications, rather than for making purchases on Amazon.
A former senior employee expressed concerns about the situation, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to these challenges, Amazon CEO Andy Jassy is reportedly exploring solutions, including the introduction of a subscription option for its voice assistant. However, some engineers working on this paid version have expressed doubts about its potential efficacy.
An Amazon spokesperson emphasized the company’s commitment to creating value through its services beyond just device sales. They noted that the Devices & Services division has successfully established several profitable ventures and is well-positioned for future growth.
On the technological front, Amazon’s new AI-powered version of Alexa, showcased in September, is said to be far from completion, as former employees suggest the company lacks sufficient data and the necessary hardware to implement the advanced model. Additionally, Amazon has reportedly shifted its focus towards developing generative AI for its Amazon Web Services division.
In response to criticisms from former employees, Amazon asserted that their claims are misleading and that the Amazon Artificial General Intelligence team has access to the required processing units, including in-house Trainium chips and Nvidia GPUs. The company maintains its goal of creating the best personal assistant available.