Amazon’s venture into profiting from Alexa-enabled devices has reportedly resulted in significant financial losses, totaling over $25 billion from 2017 to 2021, according to a Wall Street Journal report based on internal documents and sources familiar with the matter. Despite boasting hundreds of millions of customers for its devices, the Echo speakers are primarily utilized for basic functions like setting alarms rather than increasing shopping activity on Amazon.
A former senior employee expressed concern over the company’s staffing decisions, highlighting that they had recruited thousands yet were producing minimal advancements. In response to these challenges, CEO Andy Jassy is reportedly seeking solutions, including the introduction of a paid version of the Alexa voice assistant. However, there are concerns amongst engineers about the potential effectiveness of this new offering.
An Amazon spokesperson emphasized that the company prioritizes customer value beyond just device sales and noted that its Devices & Services division has successfully established multiple profitable ventures.
Additionally, a recently showcased AI-powered version of Alexa is said to be far from completion, with former employees citing insufficient data and lack of access to necessary technology for running the new language model. There are also claims that Amazon is redirecting focus towards developing generative AI for its AWS cloud unit, causing a slowdown in progress on Alexa.
In response to these critiques, Amazon refuted claims from ex-employees, asserting that its AI team has adequate resources, including proprietary chips and Nvidia GPUs, stating that its objective remains to create the leading personal assistant in the world.