Amazon’s strategy to generate revenue from its Alexa-enabled devices has not only failed to succeed but has also led to significant financial losses for the company, amounting to over $25 billion between 2017 and 2021. Internal documents and sources familiar with the situation have revealed that many users primarily utilize devices like the Echo and Kindle for basic functions such as alarm setting, rather than for making purchases through Amazon.
A former senior employee expressed concern about the investment in workforce and technology, stating that the company had hired 10,000 people but ended up creating a smart timer instead of a profitable product.
In response to these challenges, Amazon CEO Andy Jassy is reportedly exploring solutions, including the introduction of a paid subscription tier for Alexa. However, some engineers involved in this initiative are skeptical about its potential impact.
An Amazon spokesperson emphasized the company’s focus on providing value through its services rather than solely on device sales, noting that the company has successfully established several profitable businesses within its Devices & Services organization.
Furthermore, while Amazon recently showcased a new AI-powered version of Alexa, sources indicate that it may not be ready for deployment. The company reportedly lacks sufficient data and access to the necessary hardware to support the advanced capabilities of the new virtual assistant. Additionally, there is an ongoing shift in priorities, with Amazon concentrating more on generative AI developments for its cloud computing division, AWS.
In defense of its efforts, Amazon has disputed claims from former employees, asserting that its Artificial General Intelligence team has access to essential resources, including in-house Trainium chips and Nvidia GPUs. The company remains committed to its goal of developing the best personal assistant technology available.