Amazon’s efforts to generate revenue from its Alexa-enabled devices have reportedly resulted in significant financial losses for the company, amounting to over $25 billion from 2017 to 2021, according to internal documents and sources cited by the Wall Street Journal. Despite having hundreds of millions of users, it appears that many customers primarily use Echo speakers for basic functions such as setting alarms rather than making purchases through Amazon.
A former senior employee remarked on the situation, expressing concern over the extensive hiring, stating that the company had employed 10,000 people while primarily developing a basic smart timer.
CEO Andy Jassy is reportedly seeking solutions, including the proposed launch of a paid version of Alexa. However, some engineers involved in the project have expressed doubts about its potential success.
An Amazon spokesperson emphasized that the company prioritizes the value created for customers beyond just device sales, noting that their Devices & Services sector has established several profitable ventures and is well-equipped for future success.
In addition, Amazon’s new AI-enhanced version of Alexa, showcased in September, is said to be far from ready, as former employees claimed that the company lacks sufficient data and access to necessary technology for operating the advanced language model. Reports also suggest that Amazon has shifted its focus from AI-enhanced Alexa to strengthening generative AI within its cloud computing division, Amazon Web Services.
In response to these concerns, Amazon stated that its former employees are misinformed about the current state of Alexa’s AI development, asserting that its Artificial General Intelligence team has access to the required in-house chips and Nvidia GPUs. The company reaffirmed its commitment to building “the world’s best personal assistant.”