Amazon’s strategy to generate revenue from its Alexa-enabled devices has reportedly resulted in significant financial losses, with the company facing over $25 billion in losses from products like Echo and Kindle between 2017 and 2021, according to the Wall Street Journal. Despite having hundreds of millions of customers for its devices, the Echo speakers are primarily used for functions such as setting alarms rather than for shopping on Amazon.
A former senior employee expressed concern about the company’s hiring of thousands of workers, questioning the effectiveness of the devices. In light of these challenges, CEO Andy Jassy is seeking solutions and is said to be introducing a paid version of the Alexa voice assistant. However, some of the engineers involved are skeptical about the potential impact of this new feature.
An Amazon spokesperson emphasized the company’s focus on delivering value through its services, noting that the Devices & Services division has successfully created profitable ventures and is poised for future success.
Additionally, Amazon’s new AI-powered version of Alexa, showcased in September, is reported to be far from readiness. Insufficient data and limited access to the necessary processing chips for the large language model that supports the updated assistant have hindered progress. The company has supposedly shifted its focus toward developing generative AI for its cloud computing segment, Amazon Web Services.
Amazon has countered claims made by former employees, asserting that they are misinformed regarding current AI initiatives for Alexa. The company maintains that its Artificial General Intelligence team has access to both its proprietary Trainium chips and Nvidia GPUs, and remains committed to creating the world’s foremost personal assistant.