Amazon’s efforts to profit from its Alexa-enabled devices have reportedly resulted in significant financial losses, amounting to over $25 billion from 2017 to 2021, according to a report by the Wall Street Journal. Internal documents and sources familiar with the company’s operations suggest that despite having hundreds of millions of customers for its devices, the usage of Alexa-enabled Echo speakers tends to focus more on basic functions like setting alarms rather than facilitating shopping on Amazon.
A former senior Amazon employee expressed concern about the direction of the company’s investments, noting that the workforce grew significantly without achieving its intended goals. In response to these challenges, CEO Andy Jassy is exploring solutions, including launching a paid version of the voice assistant. However, engineers involved in this project have raised doubts about its potential effectiveness.
An Amazon spokesperson defended the company’s approach, highlighting that their focus is on creating value for customers through their services, rather than solely through device sales. They emphasized that the Devices & Services division has successfully established several profitable ventures.
Furthermore, the anticipated AI-enhanced version of Alexa, showcased in September, reportedly still has a long way to go. Former employees indicated that the technology lacks sufficient data and necessary chips to support the large language model that drives the new assistant. It appears that Amazon has shifted its focus toward developing generative AI for its cloud computing sector, Amazon Web Services.
In response to these criticisms, Amazon stated that former employees do not accurately represent the company’s current progress with Alexa AI and assured that the Artificial General Intelligence team has access to the necessary resources, including in-house chips and Nvidia GPUs, in their ongoing mission to develop an advanced personal assistant.