Amazon’s efforts to generate revenue from its Alexa-enabled devices have reportedly resulted in significant financial losses for the company, with losses exceeding $25 billion from 2017 to 2021, according to internal documents cited by the Wall Street Journal. Despite boasting hundreds of millions of customers who own these devices, the utilization of Alexa-enabled Echo speakers is reportedly more focused on basic functions like setting alarms rather than facilitating shopping on Amazon.
A former senior employee expressed concern about the outcome of Amazon’s investments, suggesting that the company may have overextended itself by employing numerous personnel to develop a product that doesn’t meet consumer needs.
In response to these challenges, Amazon CEO Andy Jassy is exploring solutions, including the introduction of a paid version of the voice assistant. However, some engineers involved in the project have raised doubts about its potential impact.
An Amazon spokesperson emphasized the company’s focus on the value created through the use of its services rather than solely on device sales. The spokesperson also highlighted the success of Amazon’s Devices & Services organization in establishing profitable ventures.
Additionally, the development of Amazon’s new AI-powered Alexa, unveiled in September, is reportedly facing obstacles. Former employees indicated that the necessary data and chip access to support the advanced large language model are insufficient. The company has shifted its focus toward generative AI for its cloud computing division, Amazon Web Services, potentially sidelining the progress of AI-powered Alexa.
Amazon rebuked claims from former employees about its AI ambitions, asserting that the Amazon Artificial General Intelligence team has access to both in-house chips and Nvidia GPUs, with a steadfast commitment to creating the premier personal assistant.