Amazon’s ambition to profit from its Alexa-enabled devices has reportedly resulted in significant financial losses for the company, amounting to more than $25 billion from 2017 to 2021, according to internal documents and sources familiar with the matter, as reported by the Wall Street Journal. Despite boasting hundreds of millions of users for its devices, the usage of its Echo speakers appears to be limited, with most consumers opting to utilize them for basic functions like setting alarms instead of making purchases.
A former senior employee expressed concerns, 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 subscription for Alexa. However, insiders have voiced skepticism regarding whether this paid model would lead to meaningful improvements.
An Amazon spokesperson emphasized the company’s focus on the overall value offered to customers through its services, rather than solely on device sales. They noted that the Devices & Services division has already created several profitable ventures and is poised for continued success.
In addition, Amazon revealed its new AI-driven Alexa, showcased in September, is reportedly not yet ready for launch, as former employees claim the company lacks the necessary data and components to support the advanced large language model it aims to implement. Furthermore, it has been reported that Amazon is currently prioritizing generative AI development for its cloud computing segment, Amazon Web Services, over its AI-powered Alexa initiatives.
In response to these claims, Amazon countered that its former employees are misinformed and stressed that the Amazon Artificial General Intelligence team has access to specialized Trainium chips and Nvidia GPUs. The company reiterated its commitment to its goal of creating the world’s best personal assistant.