Amazon’s strategy to monetize its Alexa-enabled devices has reportedly resulted in significant financial losses for the company, totaling over $25 billion from 2017 to 2021. Internal documents and sources cited by the Wall Street Journal reveal that, while Amazon boasts hundreds of millions of customers for its devices, many users primarily utilize the Echo speakers for basic functions such as setting alarms rather than for shopping purposes.
A former senior Amazon employee expressed concerns about the company’s focus, 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 exploring solutions, including the introduction of a paid subscription model for its voice assistant. However, there’s skepticism among engineers at Amazon regarding the potential impact of this paid version.
An Amazon spokesperson emphasized the company’s focus on the value provided through its services, stating that the Devices & Services organization has successfully established profitable ventures and is well-positioned for future growth.
In addition, reports suggest that Amazon’s new artificial intelligence-powered Alexa, which was showcased in September, is not yet ready for rollout. Former employees indicate that the company lacks sufficient data and access to the necessary chips for the large language model driving the updated virtual assistant. It’s been said that Amazon has shifted its focus towards developing generative AI for its cloud computing arm, Amazon Web Services.
Amazon has disputed claims made by former employees, asserting that they are misinformed about the company’s current efforts in AI development, and insists that the plan for Alexa remains centered on creating the best personal assistant in the market.