Amazon’s strategy to profit from its Alexa-enabled devices has fallen short, resulting in substantial financial losses for the company, estimated at over $25 billion between 2017 and 2021, according to internal documents and sources cited by the Wall Street Journal. Despite having hundreds of millions of customers, the Echo speakers are reportedly underutilized for shopping, as users primarily use them for simple tasks like setting alarms.
A former senior Amazon employee expressed concerns over the company’s hiring practices and its focus on developing basic features rather than addressing user needs. In response to these challenges, Amazon CEO Andy Jassy is reportedly targeting a solution by introducing a paid tier for its voice assistant. However, there are worries among engineers that this approach may not significantly alter the situation.
An Amazon spokesperson emphasized that the company prioritizes the overall value created by its services rather than merely the sales of its devices. The spokesperson highlighted that the Devices & Services organization has established several profitable ventures for Amazon and remains well-positioned for future success.
Additionally, the company’s latest AI-driven version of Alexa, which was demonstrated in September, is reportedly far from completion. Former employees noted that Amazon lacks sufficient data and access to the necessary chips to support the advanced technology behind the new assistant. Furthermore, it has allegedly redirected resources from developing AI for Alexa to enhance its cloud computing platform, Amazon Web Services.
In defense of these claims, Amazon contended that its former employees are misinformed about its AI initiatives, stating that the Amazon Artificial General Intelligence team has access to critical technologies for its ongoing Alexa development efforts. The company reiterated its goal to create the best personal assistant in the market.