Amazon’s strategy to profit from its Alexa-enabled devices has reportedly fallen short, resulting in the company suffering losses amounting to over $25 billion from 2017 to 2021. Internal documents and sources familiar with the situation revealed to the Wall Street Journal that despite having hundreds of millions of customers using devices such as Echo and Kindle, these products are predominantly employed for basic tasks like setting alarms rather than shopping on Amazon.
A former senior Amazon employee expressed concerns about the situation, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In light of these challenges, Amazon CEO Andy Jassy is seeking solutions and the company is reportedly planning to introduce a paid tier for its voice assistant. However, some engineers involved in developing this version of Alexa are skeptical about its potential impact.
An Amazon spokesperson emphasized the company’s focus on creating value through customer interactions with its services, rather than solely through device sales. They noted that the Devices & Services organization has successfully established several profitable ventures for Amazon.
On another note, Amazon’s newest AI-powered version of Alexa, which was showcased in September, is reportedly still in the early stages of development. Former employees indicated that the company lacks sufficient data and access to necessary chips to support the large language model driving the updated virtual assistant. Furthermore, Amazon has shifted its priorities to concentrate on developing generative AI for its cloud division, Amazon Web Services.
In response, Amazon disputed the claims made by former employees regarding its AI initiatives, asserting that the Amazon Artificial General Intelligence team has access to crucial in-house chips and Nvidia GPUs. The company reiterated its commitment to its vision for Alexa, aiming to build “the world’s best personal assistant.”