Amazon’s efforts to profit from its Alexa-enabled devices have reportedly led to significant financial losses for the company, amounting to over $25 billion between 2017 and 2021. Internal documents and sources familiar with the situation reveal that while Amazon has a vast customer base for its devices, usage patterns show that Echo speakers are primarily used for simple tasks like setting alarms, rather than for shopping.
A former senior employee expressed concerns about the situation, noting the company’s investment in hiring and development without achieving expected returns. CEO Andy Jassy is now seeking solutions, including the introduction of a paid version of the voice assistant; however, some engineers are skeptical about its potential effectiveness.
An Amazon spokesperson emphasized the company’s focus on delivering value through its services beyond just device sales, highlighting their successful and profitable business ventures in this area.
In terms of its new artificial intelligence-powered Alexa, which was showcased in September, reports indicate that it is still under development and may not be ready soon due to insufficient data and chip accessibility necessary for the advanced model. Furthermore, it appears that Amazon has shifted its priorities towards enhancing generative AI for its cloud services, Amazon Web Services.
Amazon has rebutted claims made by former employees, asserting that their views on the AI progress of Alexa are incorrect. The company insists that its efforts to create a leading personal assistant remain unchanged and that it has adequate resources to support these ambitions.