Amazon’s efforts to profit from its Alexa-enabled devices have reportedly resulted in significant financial losses, with the company losing over $25 billion between 2017 and 2021, according to internal documents reviewed by the Wall Street Journal. Despite having hundreds of millions of customers utilizing devices such as Echo and Kindle, the majority of usage appears to focus on basic functions like setting alarms, rather than shopping through the platform.
A former senior employee expressed concerns that despite hiring thousands of staff, the primary outcome has been a simple timer rather than a profitable product. In response to these challenges, Amazon CEO Andy Jassy is reportedly exploring the launch of a paid subscription model for its voice assistant, although some engineers are skeptical about its potential effectiveness.
An Amazon spokesperson emphasized the company’s commitment to creating value through its services, not solely through device sales. They stressed that the Devices & Services organization has successfully developed numerous profitable business segments and is poised for future growth.
Additionally, Amazon’s new AI-enhanced version of Alexa, showcased in September, is reportedly still in development and faces challenges related to data access and the necessary technology. The company has allegedly shifted focus towards generative AI projects for its cloud computing division, Amazon Web Services.
In response to claims regarding the readiness of its AI capabilities, Amazon defended its efforts, stating that former employees are misinformed. The company maintains that its Artificial General Intelligence team has access to the required resources and remains committed to creating what it aspires to be the world’s leading personal assistant.