Amazon’s strategy to generate revenue from its Alexa-enabled devices has reportedly backfired, leading to losses exceeding $25 billion between 2017 and 2021. Internal documents and sources familiar with the matter, as reported by the Wall Street Journal, reveal that despite a customer base in the hundreds of millions, Amazon’s Echo devices are primarily used for simple tasks like setting alarms rather than for shopping.
One former senior employee highlighted the shortcomings, noting the company’s significant investment in personnel and development, mentioning, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to this financial shortfall, CEO Andy Jassy is reportedly exploring solutions, including the introduction of a paid version of the voice assistant. However, some engineers have expressed doubts about the potential impact of this new offering.
An Amazon spokesperson stated, “We’re focused on the value we create when customers use our services, not just when they buy our devices,” asserting that the company’s Devices & Services team has developed several profitable ventures and remains poised for future success.
Additionally, there are concerns regarding Amazon’s newly announced AI-powered Alexa, which was showcased in September. Former employees indicate that it is far from ready, lacking sufficient data and the necessary chips to support the advanced language model required. Furthermore, the company is reportedly prioritizing generative AI development for its cloud computing division, Amazon Web Services, over enhancements to Alexa.
In response to these criticisms, Amazon has clarified that its former employees are not accurately reflecting the state of its AI projects, stating that its Artificial General Intelligence team has access to both its own Trainium chips and Nvidia GPUs. The company remains committed to its vision of creating the best personal assistant available.