Amazon’s strategy to generate revenue from its Alexa-enabled devices has reportedly fallen short, resulting in significant financial losses for the company. According to the Wall Street Journal, internal documents reveal that Amazon lost over $25 billion from its Echo, Kindle, and various other devices between 2017 and 2021. Although the tech giant boasts hundreds of millions of customers using its products, the Alexa-enabled Echo speakers are primarily utilized for basic tasks like setting alarms, rather than facilitating shopping on Amazon.
A former senior Amazon employee expressed concerns about the investment in staffing and development for features that may not significantly benefit the company’s bottom line. In response to these challenges, CEO Andy Jassy is exploring solutions, including the introduction of a subscription-based version of Alexa. However, some engineers at Amazon are skeptical that this new model will lead to improved performance.
An Amazon spokesperson emphasized the company’s commitment to creating value through its services, highlighting the profitability of its Devices & Services division. They asserted that Amazon is well-positioned for future successes.
In addition, the company has been working on an upgraded version of Alexa powered by artificial intelligence, but former employees suggest that it is far from ready for release. Reports indicate that Amazon lacks sufficient data and the necessary hardware to support the large language model for this new assistant. The company is said to be refocusing its AI efforts on generative AI development for its cloud computing service, Amazon Web Services, rather than prioritizing the new Alexa.
Amazon has countered claims from former employees, stating that they are misinformed about the capabilities of its AI projects. The company affirmed that its Artificial General Intelligence team has the requisite resources to achieve its aim of developing the best personal assistant available.