Amazon’s strategy to monetize its Alexa-enabled devices has reportedly resulted in significant financial losses, amounting to over $25 billion from 2017 to 2021, according to internal documents cited by the Wall Street Journal. Despite a large customer base, the company’s Echo and Kindle devices are primarily utilized for simple tasks like setting alarms rather than shopping.
Former employees have expressed concerns about the effectiveness of the devices, with one stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these challenges, CEO Andy Jassy is seeking solutions, including the introduction of a paid version of Alexa. However, some engineers doubt that this move will be impactful.
An Amazon spokesperson emphasized that the company is focused on the value created through its services, stating that the Devices & Services division has successfully established profitable ventures.
Moreover, the new AI-powered Alexa, which was previewed in September, is reportedly not ready for launch, according to some ex-employees. They noted a lack of sufficient data and the necessary technology to support the advanced language model. Amazon has shifted its focus to generative AI for its Amazon Web Services, leading to the AI version of Alexa being deprioritized.
In response to these claims, Amazon has defended its position, indicating that its Artificial General Intelligence team has access to the required technological resources to further its goals. The company’s mission remains to develop the best personal assistant available.