Amazon’s strategy to monetize its Alexa-enabled devices has reportedly faltered, leading to significant financial losses for the company. An internal review indicates that Amazon lost over $25 billion on products such as the Echo and Kindle between 2017 and 2021. Although the company boasts hundreds of millions of device users, the Echo speakers are primarily utilized for basic functions like setting alarms rather than facilitating purchases.
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 these challenges, Amazon CEO Andy Jassy is seeking solutions, including the introduction of a premium version of Alexa. However, some engineers fear that this paid model may not yield the desired impact.
An Amazon representative emphasized their commitment to providing value through the use of their services, asserting that the company’s Devices & Services division has successfully established numerous lucrative business avenues and is well-equipped for future success.
Additionally, the development of Amazon’s new AI-enhanced Alexa, which was showcased in September, faces setbacks. Reports from former employees suggest that the technology is not near completion due to insufficient data and lack of access to essential processing chips for the advanced language model. The company has allegedly shifted focus towards developing generative AI for its Amazon Web Services division instead.
In response to these criticisms, Amazon contends that its past employees lack current knowledge regarding their Alexa AI initiatives, asserting that the Amazon Artificial General Intelligence team has access to necessary technology, including in-house chips and Nvidia GPUs. The company remains determined to create the best personal assistant available.