Amazon’s efforts to profit from its Alexa-enabled devices have fallen short, with the company reportedly losing over $25 billion between 2017 and 2021. According to the Wall Street Journal, internal documents and sources familiar with the situation reveal that despite having hundreds of millions of customers, many users primarily utilize the Echo speakers for basic tasks like setting alarms rather than making purchases on Amazon.
A former senior employee expressed concern over the hiring of 10,000 people for what ultimately turned out to be a limited functionality. In response to these challenges, Amazon’s CEO Andy Jassy is reportedly seeking solutions, including the launch of a paid version of Alexa. However, some engineers involved in this project are skeptical about its potential success.
An Amazon spokesperson emphasized the company’s focus on creating value for customers using its services rather than solely selling devices. They noted that the Devices & Services division has established several profitable ventures and is positioned for future success.
On another front, the new AI-enhanced version of Alexa, which was demonstrated in September, reportedly faces significant hurdles. Former employees have indicated that Amazon lacks sufficient data and necessary chip access to effectively run the large language model for this next generation of its virtual assistant. Additionally, it has been reported that the company has shifted its priority towards developing generative AI for its cloud service, Amazon Web Services.
In response to these claims, Amazon asserted that the concerns raised by former employees are inaccurate and emphasized that its Artificial General Intelligence team has the required resources, including proprietary and Nvidia chips, to pursue their vision of creating an advanced personal assistant.