Amazon’s ambition to profit from its Alexa-enabled devices has not met expectations and is said to have resulted in substantial financial losses for the company. Internal documents reveal that from 2017 to 2021, Amazon incurred losses exceeding $25 billion from its Echo, Kindle, and other device lines. Despite having hundreds of millions of customers, the primary use of Alexa-enabled Echo speakers appears to be for basic functions like setting alarms and utilizing free applications, rather than making purchases on Amazon.
A former senior employee expressed concerns about Amazon’s hiring practices and the effectiveness of their voice assistant, likening it to creating a “smart timer.” In response to the ongoing challenges, CEO Andy Jassy is seeking solutions, including the introduction of a paid version of Alexa. However, reports indicate that some engineers within the company doubt that this new tier will significantly change the financial outcome.
An Amazon spokesperson emphasized the company’s focus on the value generated from customer interactions, asserting that its Devices & Services division has created several profitable businesses and is well-equipped for future success.
Additionally, updates regarding Amazon’s AI-enhanced Alexa, showcased in September, suggest that it may not be ready for deployment. Former employees have claimed that the company lacks the necessary data and access to hardware to effectively run the new large language model. Furthermore, Amazon is reportedly prioritizing generative AI development for its cloud computing sector, Amazon Web Services, over its AI-driven Alexa.
In rebuttal, Amazon contested the claims made by its ex-employees, stating that they are misinformed about its current artificial intelligence endeavors. The company assured that its Artificial General Intelligence team has access to essential hardware for development and remains committed to its goal of creating the premier personal assistant in the market.