Amazon’s strategy to monetize its Alexa-enabled devices has failed to deliver the expected results, leading to significant financial losses amounting to over $25 billion between 2017 and 2021, according to reports from the Wall Street Journal. The losses are attributed to the performance of devices such as the Echo and Kindle, which, despite boasting hundreds of millions of users, are primarily used for basic functions like setting alarms rather than for shopping on Amazon.
An anonymous former senior employee expressed concerns about the company’s trajectory, highlighting a disconnect between its workforce and the utility of its products. In response to these challenges, Amazon CEO Andy Jassy is reportedly seeking solutions, including the introduction of a paid tier for its voice assistant. However, there are doubts among Amazon engineers about the effectiveness of this new offering.
An Amazon spokesperson emphasized the company’s commitment to delivering value beyond device sales, noting the establishment of profitable ventures within its Devices & Services division. The spokesperson reassured that Amazon remains well-positioned for future growth.
In addition to these developments, Amazon’s new artificial intelligence-enhanced Alexa, showcased in September, faces hurdles. Former employees claim that the company lacks sufficient data and the necessary hardware to support the new large language model (LLM) for the assistant. Furthermore, Amazon has reportedly shifted its focus towards generative AI for its cloud computing segment, Amazon Web Services, which has impacted the AI-powered Alexa initiative.
Despite these criticisms from former staff, Amazon contends that their assessments are inaccurate. The company asserts that its Artificial General Intelligence team has access to critical resources, including proprietary Trainium chips and Nvidia graphics processing units (GPUs), and remains committed to creating a leading personal assistant.