Amazon’s strategy to monetize its Alexa-enabled devices has not been as successful as anticipated, leading the company to reportedly incur losses amounting to over $25 billion from 2017 to 2021. According to internal documents and insights from anonymous sources, the majority of users seem to utilize the devices, such as the Echo and Kindle, mainly for basic functions like setting alarms, rather than for shopping.
A former senior employee expressed concerns about the company’s hiring decisions, noting, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In pursuit of a solution, Amazon’s CEO Andy Jassy is exploring the introduction of a paid version of Alexa, although engineers working on this new offering have voiced skepticism regarding its potential effectiveness.
An Amazon spokesperson addressed these concerns by stating that the company prioritizes the value derived from customer interactions with its services, rather than solely from device sales. They highlighted that the Devices & Services division has established multiple profitable ventures for Amazon and remains optimistic about future success.
However, reports suggest that Amazon’s latest AI-powered version of Alexa is still in development and not near completion, as former employees indicated that the company lacks sufficient data and access to necessary processing chips for the new technology. Interestingly, Amazon has shifted its focus toward enhancing generative AI within its cloud computing branch, Amazon Web Services.
In response to the critiques from former employees, Amazon defended its current AI efforts, asserting that the Amazon Artificial General Intelligence team has access to essential chips and GPUs, and reaffirmed its commitment to creating the “world’s best personal assistant.”