Amazon’s strategy to generate revenue from its Alexa-enabled devices has reportedly not yielded the expected results, leading to significant financial losses for the company. According to an internal report mentioned by the Wall Street Journal, Amazon lost over $25 billion between 2017 and 2021 on its Echo, Kindle, and other devices. Despite having hundreds of millions of customers, the devices are primarily used for basic functions like setting alarms rather than for shopping on Amazon.
A former senior employee expressed concerns about the workforce expansion, 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 pursuing solutions, including the introduction of a paid version of its voice assistant. However, some engineers working on the paid version have expressed doubts about its potential impact.
An Amazon spokesperson emphasized that the company is focused on the value created through its services rather than just device sales, noting that the Devices & Services organization has established several profitable ventures.
Moreover, a new AI-enhanced version of Alexa, showcased by Amazon in September, is reportedly not close to being ready. Former employees have indicated that the company lacks sufficient data and access to the necessary chips for the large language model supporting the new assistant. Furthermore, Amazon has prioritized generative AI developments for its cloud computing division, Amazon Web Services, over enhancements to Alexa.
In response to these claims, Amazon stated that the former employees are misinformed and that the Amazon Artificial General Intelligence team has the required resources to proceed with its goals. The company reaffirmed its commitment to developing “the world’s best personal assistant.”