Amazon’s strategy to generate revenue from its Alexa-enabled devices has reportedly fallen short, leading to substantial financial losses for the company. According to the Wall Street Journal, which cited internal documents and anonymous sources, Amazon incurred over $25 billion in losses from its Echo, Kindle, and other devices between 2017 and 2021. Despite millions of customers using these devices, the primary functions of the Alexa-enabled Echo speakers seem to revolve around tasks like setting alarms rather than facilitating shopping on Amazon.
A former senior Amazon employee noted concerns over the efficiency of the workforce, indicating that hiring thousands of employees resulted in minimal advancements beyond basic functions.
In response to these challenges, Amazon’s CEO Andy Jassy is seeking solutions and is set to introduce a paid tier for its voice assistant. However, some engineers reportedly doubt that this new version of Alexa will significantly alter the current situation.
An Amazon spokesperson emphasized that the company focuses on creating value for customers beyond just device sales, highlighting the success of the Devices & Services division.
Additionally, the latest AI-enhanced version of Alexa, showcased in September, is reportedly far from completion due to insufficient data and a lack of access to essential hardware for the large language model that powers it. Meanwhile, Amazon has shifted priorities to enhance generative AI for its cloud computing segment, Amazon Web Services.
In response to concerns raised by former employees, Amazon asserts that these claims are incorrect and that its Artificial General Intelligence team has access to necessary technology, including in-house chips and Nvidia GPUs. The company remains committed to developing what it aims to be the best personal assistant globally.