Amazon’s efforts to profit from its Alexa-enabled devices have reportedly resulted in significant financial losses, costing the company over $25 billion from 2017 to 2021, according to The Wall Street Journal. This information comes from internal documents and sources familiar with the situation. Despite having hundreds of millions of customers using devices like the Echo and Kindle, it seems that many users primarily utilize these devices for basic functions like setting alarms rather than for shopping on the Amazon platform.
A former senior Amazon employee expressed concern about the hiring boom in the company, pointing out that they have invested heavily but are producing limited results. In response to these challenges, CEO Andy Jassy is reportedly exploring options to generate revenue from a new paid version of Alexa. However, insiders have indicated that some engineers are skeptical about whether this approach will lead to significant improvements.
An Amazon spokesperson clarified that the company is concentrating on the value provided to customers beyond the sale of devices themselves. They assert that the Devices & Services division has created multiple profitable businesses and is positioned for future success.
On a related note, the company’s new AI-enhanced version of Alexa, which was showcased in September, may not be fully operational yet. Previous employees have claimed that Amazon lacks the necessary data and resources for the advanced language model needed for the updated assistant. Additionally, the company has reportedly shifted its focus toward generative AI development for Amazon Web Services, deprioritizing the new version of Alexa.
Amazon disputed the claims made by former employees, stating that the Alexa Artificial General Intelligence team has access to the required technology, including in-house chips and Nvidia GPUs. The company reiterated its commitment to delivering the best personal assistant in the market.