Amazon’s strategy to generate revenue through its Alexa-enabled devices has reportedly resulted in significant financial losses, amounting to over $25 billion between 2017 and 2021. This information was revealed by the Wall Street Journal, which cites internal documents and unnamed sources familiar with the situation. Despite boasting hundreds of millions of customers for its devices, the Echo speakers are predominantly utilized for basic tasks like setting alarms, rather than shopping on Amazon.
A former senior Amazon employee expressed concerns about the company’s hiring and investments, indicating that the focus may have strayed from its original goals. In response, CEO Andy Jassy is reportedly seeking solutions, including the introduction of a paid version of the voice assistant. However, some engineers working on this project have expressed doubts about its potential effectiveness.
An Amazon spokesperson emphasized that the company prioritizes the value generated from customer interactions with its services, rather than solely from device sales. They noted that the Devices & Services division has created several profitable ventures for Amazon and is well-equipped to continue this trend.
On another note, Amazon’s newly developed AI-powered version of Alexa, showcased in September, is allegedly not yet ready, as reported by former employees. The company is said to lack sufficient data and access to necessary chips for running the large language model intended for this update. Additionally, there are claims that the AI-focused developments for Alexa have been deprioritized in favor of enhancing generative AI for Amazon Web Services.
In response to these criticisms, Amazon counters that the assertions made by former employees are inaccurate. The company claims that its Artificial General Intelligence team has access to essential in-house chips and Nvidia GPUs, and it remains committed to its plan of creating the best personal assistant in the market.