Amazon’s attempts to profit from its Alexa-enabled devices have reportedly resulted in significant financial losses, amounting to over $25 billion between 2017 and 2021, according to internal documents and sources familiar with the matter. Despite having hundreds of millions of customers using devices like the Echo and Kindle, analysis indicates that these products are primarily utilized for simple tasks such as setting alarms, rather than for shopping on Amazon.
Concerns about the effectiveness of the strategy were voiced by a former senior employee who remarked, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to the challenges, Amazon CEO Andy Jassy is seeking solutions, including the introduction of a paid version of its voice assistant. However, some engineers involved in the development of this upgraded Alexa have expressed doubts about its potential impact.
An Amazon spokesperson emphasized that the company is dedicated to delivering value through its services beyond just device sales, highlighting the profitable ventures established by its Devices & Services organization.
Furthermore, reports suggest that Amazon’s newly introduced AI-powered Alexa is not yet adequately prepared for launch, with former employees claiming that the company lacks sufficient data and necessary chip access for the advanced language model. Amazon is allegedly refocusing its efforts on generative AI for its cloud computing service, Amazon Web Services.
In response to these concerns, Amazon has defended its position, asserting that its Artificial General Intelligence team has the required resources and remains committed to developing an exceptional personal assistant.