Amazon’s strategy to profit from its Alexa-enabled devices has reportedly led to significant financial losses, totaling more than $25 billion from 2017 to 2021, according to the Wall Street Journal, which referenced internal documents and sources familiar with the situation. Despite having hundreds of millions of customers, many users tend to utilize Amazon’s Echo devices more for basic functions, like setting alarms, rather than for shopping on Amazon.
A former senior employee expressed concerns about the investment in the technology, noting the large workforce and effort put into what they perceived as a basic functionality. In response to these challenges, Amazon CEO Andy Jassy is reportedly seeking solutions, including the introduction of a paid version of Alexa. However, some engineers involved in this project have voiced skepticism regarding its potential impact.
In a statement, an Amazon spokesperson highlighted the company’s focus on the value created through customer engagement, beyond just device sales, asserting that its Devices & Services division has successfully established multiple profitable ventures.
In addition, Amazon’s latest AI-enhanced version of Alexa, which was previewed in September, is reportedly not near completion, as former employees indicated that the company lacks sufficient data and the necessary chips to support the advanced language model driving the new assistant. Moreover, it seems that Amazon has shifted its priority towards developing generative AI for its cloud division, Amazon Web Services.
In defense of its progress, Amazon disputed claims from former employees regarding its Alexa AI initiatives, asserting that the Amazon Artificial General Intelligence team has access to appropriate resources, including both its Trainium chips and Nvidia GPUs. The company remains committed to its objective of developing the leading personal assistant technology.