Amazon’s strategy to profit from its Alexa-enabled devices has reportedly resulted in significant financial losses, amounting to over $25 billion from 2017 to 2021, according to internal documents and sources familiar with the situation. Despite having hundreds of millions of customers for its devices, the majority of use for Alexa-enabled Echo speakers revolves around basic functions like setting alarms rather than making purchases through Amazon.
A former senior Amazon employee expressed concerns about the company’s oversight, 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 seeking solutions, including the introduction of a paid tier for Alexa. However, there are reports suggesting that engineers developing this version are skeptical about its potential impact on the current situation.
An Amazon representative emphasized the company’s focus on the value created for customers through their services, highlighting that the Devices & Services division has successfully established numerous profitable ventures and is positioned for future success.
In addition, Amazon unveiled a new AI-powered version of Alexa in September, but former employees have raised doubts about its readiness. Issues such as insufficient data and a lack of access to necessary chips to run the new large language model have been cited. Furthermore, the company has reportedly shifted its priorities to concentrate on generative AI for its cloud computing division, Amazon Web Services.
Amazon disputed claims from former employees, asserting that they are misinformed regarding the current capabilities of its Alexa AI initiatives. The company maintains that its Artificial General Intelligence team has access to both its proprietary Trainium chips and Nvidia GPUs, reaffirming its commitment to developing the best personal assistant available.