Amazon’s strategy to generate revenue from its Alexa-enabled devices has reportedly fallen short, resulting in substantial losses for the company, estimated at over $25 billion between 2017 and 2021, according to an article in the Wall Street Journal. This figure stems from internal documents and insights from anonymous sources familiar with the situation. Despite attracting hundreds of millions of customers, research indicates that Amazon’s Echo speakers are predominantly used for basic functions like setting alarms and accessing free applications, rather than facilitating purchases.
A former senior employee expressed concerns about Amazon’s hiring practices and product development, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In light of these challenges, Amazon’s CEO, Andy Jassy, is reportedly searching for solutions, which may include the introduction of a paid tier for its voice assistant. However, some engineers involved in this initiative are skeptical about its potential impact.
An Amazon spokesperson addressed this situation, emphasizing the company’s focus on delivering value through its services rather than solely through device sales. The spokesperson asserted that the Devices & Services division has successfully established various profitable ventures and is well-positioned for future growth.
In addition, Amazon’s new AI-powered Alexa, showcased in a demo last September, is reportedly not close to launch readiness. Concerns have been raised by former employees regarding the availability of necessary data and the hardware to support the advanced technology. Notably, Amazon seems to have shifted its priorities, focusing more on generative AI for its cloud computing component, Amazon Web Services.
In response to these claims, Amazon argued that its former employees are misinformed regarding the company’s current efforts in AI, asserting that its Artificial General Intelligence team has access to the required technologies, including both proprietary Trainium chips and Nvidia GPUs. The company reiterated its commitment to developing “the world’s best personal assistant” with Alexa.