Amazon’s strategy to profit from its Alexa-enabled devices has not yielded the expected results, leading to significant financial losses for the company. Reports indicate that between 2017 and 2021, Amazon incurred losses exceeding $25 billion on its Echo, Kindle, and other devices. Despite having a vast customer base for these products, it appears that the Echo speakers are predominantly utilized for simple functions like setting alarms rather than facilitating purchases on Amazon.
A former senior employee expressed concerns about the investment in personnel and technology, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to these challenges, CEO Andy Jassy is seeking solutions and is reportedly introducing a paid version of its voice assistant. However, some engineers working on this adaptation have expressed doubts about its potential impact.
An Amazon spokesperson emphasized the company’s commitment to creating value through its services beyond just device sales, asserting that the Devices & Services sector has successfully established profitable operations and is poised for future success.
Additionally, Amazon’s recent advancements with an AI-powered version of Alexa, unveiled in September, are reportedly still in developmental stages, with former employees noting that the necessary data and chips for the new large language model are not yet available. The company is currently prioritizing generative AI for its cloud computing division, Amazon Web Services, over the AI-enhanced Alexa.
In defense of its efforts, Amazon stated that former employees’ comments are inaccurate and that its Artificial General Intelligence team has access to essential resources, including proprietary hardware and Nvidia GPUs. The company reaffirmed its goal of developing “the world’s best personal assistant” through Alexa.