Amazon’s efforts to profit from its Alexa-enabled devices have reportedly resulted in significant financial losses, totaling over $25 billion from 2017 to 2021, according to internal documents and individuals familiar with the situation, as reported by the Wall Street Journal. Despite having hundreds of millions of customers, the usage of Amazon’s Echo speakers is primarily for basic functions like setting alarms, rather than for shopping.
A former senior Amazon employee expressed concerns about the company’s hiring practices and product development, commenting on the disparity between the resources invested and the outcome.
In response to these challenges, Amazon CEO Andy Jassy is exploring solutions, including the introduction of a paid subscription model for Alexa. However, some engineers working on this new version remain skeptical about its effectiveness.
An Amazon spokesperson emphasized that the company prioritizes the value created for customers through its services, not just its device sales. They stated that the Devices & Services organization has developed several profitable ventures and is well-equipped for future growth.
Additionally, Amazon’s new AI-enhanced Alexa, showcased in September, is reportedly not ready for implementation, according to former employees. They highlight a lack of necessary data and access to essential chips for the large language model required for the upgraded assistant. The company has also shifted its focus toward enhancing generative AI for its cloud computing division, Amazon Web Services.
Amazon has denied these claims from former staff, asserting that its Artificial General Intelligence team has the needed resources, including proprietary Trainium chips and Nvidia GPUs. The company maintains that its goal is to develop the world’s leading personal assistant.