Amazon’s strategy to generate revenue through its Alexa-enabled devices has reportedly faced significant challenges, resulting in losses exceeding $25 billion between 2017 and 2021. According to internal documents and sources familiar with the situation cited by the Wall Street Journal, despite having hundreds of millions of customers for its devices, the Echo speakers are primarily used for basic functions like setting alarms rather than making purchases.
A former senior employee expressed concern, stating that despite hiring a large workforce, they ended up producing a product that customers mainly use as a smart timer. In response, Amazon CEO Andy Jassy is seeking solutions and is expected to introduce a paid version of Alexa. However, some engineers within the company have expressed skepticism regarding the potential success of this initiative.
An Amazon spokesperson emphasized that the company is concentrating on the overall value provided to customers through its services rather than solely focusing on device sales. They noted that Amazon’s Devices & Services division has successfully established several profitable ventures.
Simultaneously, Amazon’s latest AI-enhanced version of Alexa has reportedly not met readiness expectations, according to former employees. The company is said to lack sufficient data and resources to support the large language model driving the new assistant, as reports indicate Amazon is prioritizing generative AI development for its cloud service, Amazon Web Services.
In defense, Amazon stated that rumors from former employees about its AI capabilities are incorrect, asserting that the Amazon Artificial General Intelligence team has access to necessary technologies, including its in-house chips and Nvidia GPUs. The company’s aim for Alexa continues to be the development of the best personal assistant available.