Amazon’s strategy to generate revenue through its Alexa-enabled devices appears to be falling short, resulting in substantial financial losses for the company, estimated at over $25 billion from 2017 to 2021. According to the Wall Street Journal, internal documents and sources familiar with the situation reveal that many customers primarily use Echo speakers for basic functions like setting alarms, rather than for making purchases, despite the massive user base.
A former senior employee expressed concerns about the outcomes of investments, 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 reportedly exploring a paid version of Alexa. However, there are doubts among some engineers about the potential success of this initiative.
An Amazon spokesperson emphasized the company’s focus on creating value through its services, stating that the Devices & Services division has established several profitable ventures and is positioned for future success.
Meanwhile, the anticipated rollout of a new AI-enhanced version of Alexa, which was showcased in September, faces hurdles. Former employees indicated that the technology is not yet prepared for launch due to insufficient data and a lack of access to the necessary chips for the large language model driving the assistant. Additionally, Amazon has redirected its focus towards developing generative AI for its cloud computing division, Amazon Web Services.
Amazon has countered claims made by former employees, asserting that they are misinformed about current efforts and that its Artificial General Intelligence team has access to essential resources for advancing Alexa. The company remains committed to its goal of creating the most advanced personal assistant available.