Amazon’s strategy to profit from its Alexa-enabled devices has reportedly resulted in significant financial losses, amounting to over $25 billion from 2017 to 2021. This information comes from internal documents and sources familiar with the company’s situation, as reported by the Wall Street Journal. Despite Amazon having hundreds of millions of customers using its devices, the Echo speakers are primarily employed for basic functions like setting alarms rather than for making purchases.
A former senior Amazon employee expressed concerns about the company’s workforce expansion and the direction of their products, saying, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to these challenges, Amazon’s CEO Andy Jassy is seeking solutions and is reportedly preparing to introduce a paid version of its voice assistant. However, some engineers involved in this project have voiced skepticism regarding its potential effectiveness.
An Amazon spokesperson emphasized that the company is concentrating on the value generated when customers engage with its services, not solely through device sales. They highlighted that the Devices & Services division has successfully established profitable ventures and remains optimistic about future prospects.
Additionally, the new AI-enhanced version of Alexa, showcased in September, is said to be far from complete. Former employees claim the company lacks sufficient data and resources to utilize the necessary chips for the advanced large language model that underpins the updated assistant. Moreover, Amazon has reportedly shifted its priorities to focus on generative AI innovations for its cloud services under Amazon Web Services.
In response to these claims, Amazon refuted accusations of inadequacy regarding its AI initiatives, asserting that the Amazon Artificial General Intelligence team has access to the required resources, including in-house Trainium chips and Nvidia GPUs. The company also affirmed its commitment to developing the best personal assistant in the market.