Amazon’s strategy to generate revenue from its Alexa-enabled devices has fallen short, leading to significant losses for the company, reportedly over $25 billion from 2017 to 2021. According to internal documents and sources familiar with the situation, while Amazon has attracted hundreds of millions of customers to its devices like Echo and Kindle, these products are primarily utilized for basic functions, such as setting alarms, rather than shopping on Amazon.
A former senior Amazon employee remarked on the situation, expressing concern about the company’s hiring of 10,000 people for what has seemingly become a non-revenue-generating product.
In response to these challenges, Amazon CEO Andy Jassy is reportedly exploring solutions, including the introduction of a paid version of Alexa. However, some engineers connecting with this initiative have expressed doubts about its potential effectiveness.
An Amazon spokesperson stated that the company emphasizes the value generated when customers engage with its services, not solely through device purchases. They noted that the Devices & Services unit has successfully established profitable ventures and is poised for future growth.
Additionally, reports suggest that Amazon’s newly revealed AI-powered Alexa, showcased in September, is far from completion. Former employees claim the company lacks sufficient data and access to necessary chips to support the large language model behind the assistant. Furthermore, Amazon is said to be shifting focus towards developing generative AI for its cloud computing division, Amazon Web Services, rather than prioritizing the AI functionality of Alexa.
In response to these claims, Amazon contended that its former employees are misinformed about the ongoing AI initiatives. The company assured that the Amazon Artificial General Intelligence team has access to its proprietary Trainium chips and Nvidia GPUs, reiterating its commitment to developing the best personal assistant in the world.