Amazon’s initiative to generate revenue through its Alexa-enabled devices appears to have backfired, with reports suggesting the company has incurred losses amounting to over $25 billion from 2017 to 2021. Internal documents and sources familiar with the situation disclosed that, despite the popularity of devices like the Echo and Kindle, many customers primarily use them for basic functions such as setting alarms rather than for making purchases on Amazon.
A former senior Amazon employee expressed concerns about the situation, reflecting on the company’s massive investment in personnel and infrastructure, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to these challenges, Amazon CEO Andy Jassy is reportedly seeking solutions, including the introduction of a paid version of its voice assistant. However, some engineers involved in developing this paid version are skeptical about its potential impact.
An Amazon spokesperson emphasized the company’s commitment to creating value through its services, not solely through device sales. The company claims to have established several profitable ventures within its Devices & Services division.
Meanwhile, Amazon’s upcoming AI-enhanced version of Alexa, unveiled in September, is said to be far from ready. Former employees indicated that the company lacks sufficient data and access to the necessary hardware to support the advanced language model intended for the updated assistant. Furthermore, Amazon has reportedly shifted its focus towards enhancing generative AI capabilities for its cloud division, Amazon Web Services.
In response to these concerns, Amazon contested the views of its former employees, asserting that its Artificial General Intelligence team has access to critical resources, including proprietary chips and Nvidia GPUs. The company reaffirmed its commitment to developing what it aims to be the leading personal assistant.