Amazon’s strategy to generate revenue through its Alexa-enabled devices has reportedly been unsuccessful, leading to significant financial losses for the company. Internal documents reveal that Amazon incurred losses exceeding $25 billion from products like the Echo and Kindle between 2017 and 2021. Despite having hundreds of millions of customers, the Echo speakers are predominantly used for basic functions such as setting alarms, rather than for shopping on Amazon.
A former senior employee expressed concerns that the workforce dedicated to these products had been utilized to create functionalities that do not generate substantial income. As the company faces these challenges, CEO Andy Jassy is seeking solutions, including the introduction of a paid version of the voice assistant. However, some engineers fear that this new offering may not resolve the underlying issues.
An Amazon spokesperson defended the approach, stating that the company emphasizes the value created through its services beyond just device sales. They noted that Amazon’s Devices & Services division has already established various profitable initiatives.
In addition, reports indicate that Amazon’s new AI-enhanced Alexa, showcased in September, is not yet ready for deployment. Former employees suggest that the company lacks adequate data and resources to effectively run the advanced language model required for this iteration. Instead, Amazon has reportedly shifted its focus to generative AI for its cloud computing division, Amazon Web Services.
Amazon disputes claims from former staff regarding the state of its AI advancements, asserting that its Artificial General Intelligence team has access to the necessary technology. The company maintains its commitment to developing a leading personal assistant.