Amazon’s financial strategy surrounding its Alexa-enabled devices has faltered, reportedly costing the company over $25 billion between 2017 and 2021. Internal documents and sources familiar with the situation shared with the Wall Street Journal reveal that despite a customer base of hundreds of millions, Echo speakers are primarily used for basic functions like setting alarms rather than for shopping purposes.
A former senior employee expressed concern about the company’s hiring and development efforts, saying, “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 considering a paid version of its voice assistant. However, some engineers involved with this initiative have expressed skepticism about its potential effectiveness.
An Amazon spokesperson emphasized that the company’s focus is on delivering value through its services, stating, “Our Devices & Services organization has established numerous profitable businesses for Amazon and is well-positioned to continue doing so going forward.”
In addition, the newly introduced AI-powered Alexa, showcased in September, is said to be far from readiness, based on insights from former Amazon employees. Reports indicate that the company lacks sufficient data and access to necessary hardware for the advanced capabilities of the new version. Furthermore, Amazon has allegedly shifted priorities towards developing generative AI for its cloud unit, Amazon Web Services.
Amazon has countered these claims, asserting that the insights from former employees are misguided and that its Artificial General Intelligence team has access to both its own Trainium chips and Nvidia GPUs. The company reiterated its commitment to creating “the world’s best personal assistant.”