Amazon’s strategy to profit from its Alexa-enabled devices appears to be faltering, leading to reported losses of over $25 billion from its Echo, Kindle, and other devices between 2017 and 2021, according to the Wall Street Journal. The report, which cites internal documents and sources close to the matter, indicates that while millions of customers own these devices, the Echo speakers are primarily utilized for simple tasks like setting alarms rather than online shopping.
A former senior Amazon employee expressed concerns about the company’s substantial hiring, noting, “We worried we’ve hired 10,000 people, and we’ve built a smart timer.”
In an effort to address these issues, Amazon CEO Andy Jassy is reportedly exploring the option of launching a paid subscription for the voice assistant. However, some engineers involved with the paid version of Alexa have expressed skepticism regarding its potential impact.
An Amazon spokesperson stated, “We are focused on the value we create when customers use our services, not just when they buy our devices.” The spokesperson added that the Devices & Services division continues to establish profitable business models and is poised for future success.
In addition, Amazon’s newly introduced AI-powered Alexa, showcased in September, is reportedly not ready for rollout, as former employees claim the company lacks adequate data and access to the necessary chips to operate the advanced large language model (LLM). Furthermore, it is said that Amazon has shifted its priorities towards developing generative AI for its cloud division, Amazon Web Services.
In response to the criticisms from former employees, Amazon asserted that its team dedicated to Artificial General Intelligence has the necessary access to both proprietary Trainium chips and Nvidia graphics processing units (GPUs). The company’s objective for Alexa remains to create the world’s premier personal assistant.