Amazon’s strategy to generate revenue from its Alexa-enabled devices appears to be faltering, with losses amounting to over $25 billion from 2017 to 2021, according to internal documents and sources cited by the Wall Street Journal. Despite having hundreds of millions of customers, many users primarily utilize Echo speakers for simple tasks like setting alarms, rather than making purchases.
A former senior Amazon employee expressed concerns about the company’s hiring practices, questioning the effectiveness of their efforts in this area. In response to these challenges, Amazon CEO Andy Jassy is reportedly exploring the introduction of a paid version of Alexa, although some engineers within the company are skeptical about the potential for significant impact.
An Amazon spokesperson emphasized the company’s focus on value creation for customers beyond just device sales, outlining the success of its Devices & Services division in establishing profitable business models.
Additionally, the newly unveiled AI-enhanced version of Alexa, demonstrated in September, is said to be far from ready, as former employees allege that Amazon lacks sufficient data and necessary chips for its development. The company has supposedly shifted its attention to generative AI projects within its cloud division, Amazon Web Services.
In response to these claims, Amazon contends that the information from former employees is inaccurate and that its Artificial General Intelligence team has access to vital technology needed for its Alexa advances. The company remains committed to its goal of creating the leading personal assistant.