Amazon’s strategy to generate revenue through its Alexa-enabled devices has reportedly backfired, leading to losses exceeding $25 billion from 2017 to 2021. The Wall Street Journal cited internal documents and sources familiar with the situation in reporting that despite having hundreds of millions of customers, many users primarily utilize Alexa for basic functions like setting alarms rather than shopping on Amazon.
A former senior employee expressed concerns, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to the financial setbacks, Amazon CEO Andy Jassy is seeking solutions, including the introduction of a paid subscription for Alexa. However, some engineers believe that this paid version may not significantly change the current scenario.
An Amazon spokesperson emphasized that the company is focused on the overall value provided to customers rather than solely on device sales, asserting that the Devices & Services division has successfully established several profitable ventures.
In other news, Amazon’s new artificial intelligence-enhanced version of Alexa, showcased in September, is reportedly facing challenges, with former employees indicating that it is far from ready. The company lacks sufficient data and essential chips to operate the new large language model that powers this upgrade. Additionally, reports suggest that Amazon has shifted its focus toward generative AI for its cloud computing division, Amazon Web Services.
Amazon refuted claims from former employees, stating they are misinformed about its current AI capabilities. The company claimed that the Amazon Artificial General Intelligence team has access to both proprietary Trainium chips and Nvidia graphics processing units (GPUs) and reaffirmed its commitment to developing the best personal assistant in the world.