Amazon’s strategy to generate revenue from its Alexa-enabled devices has thus far resulted in significant financial losses, with the company reportedly losing over $25 billion between 2017 and 2021. This figure comes from internal documents and sources close to the situation, as reported by the Wall Street Journal. Despite having hundreds of millions of customers for its devices, the usage of Alexa-enabled Echo speakers is often limited to basic functions like setting alarms, rather than facilitating purchases on Amazon’s platform.
A former senior employee expressed concern about the company’s focus, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to this challenge, Amazon CEO Andy Jassy is exploring solutions, including the introduction of a paid version of Alexa. However, there are doubts among engineers about the potential success of this initiative.
An Amazon spokesperson emphasized that the company prioritizes the value generated from its services, not just device sales. They noted that the Devices & Services division has created several profitable ventures and is positioned for future success.
Additionally, Amazon’s new AI-powered Alexa, showcased in September, is reportedly not ready for deployment, with former employees indicating that the company lacks sufficient data and access to the necessary hardware for the technology. There are also claims that Amazon is shifting its focus to developing generative AI for its cloud computing division, Amazon Web Services, rather than advancing Alexa.
However, Amazon has countered these criticisms, asserting that the views of former employees are inaccurate and that the artificial intelligence team has access to essential resources, including proprietary chips and Nvidia GPUs. The company maintains that its objective for Alexa remains unchanged: to create the world’s leading personal assistant.