Amazon’s strategy to profit from its Alexa-enabled devices has not been successful, reportedly resulting in the company losing over $25 billion from 2017 to 2021. According to internal documents and sources familiar with the situation, the Wall Street Journal revealed that despite having hundreds of millions of customers, Amazon’s Echo devices are primarily used for simple tasks like setting alarms, rather than for making purchases through the platform.
A former senior Amazon employee expressed concerns about the company’s hiring spree, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these challenges, CEO Andy Jassy is seeking solutions and is set to introduce a paid version of the Alexa voice assistant. However, some engineers reportedly doubt that this new model will significantly change the current trends.
An Amazon spokesperson emphasized that the company is prioritizing the value created through customer interactions with its services, not solely focusing on device sales. They noted that the Devices & Services organization has successfully established several profitable ventures.
Additionally, former employees reported that Amazon’s new AI-enhanced Alexa, showcased in September, is not yet fully developed. Issues with data acquisition and access to necessary chips for the large language model that powers the revised assistant have been highlighted. Meanwhile, Amazon is allegedly directing its resources towards generative AI initiatives for its cloud division, Amazon Web Services.
In response to these claims, Amazon stated that its former employees are misinformed and confirmed that the Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs. They insist their objective remains to create “the world’s best personal assistant.”