Amazon’s strategy to generate revenue from its Alexa-enabled devices has not been successful, leading the company to incur losses amounting to over $25 billion from 2017 to 2021, according to a report from the Wall Street Journal citing internal documents and sources familiar with the situation. Despite having hundreds of millions of customers using their devices, the Alexa-enabled Echo speakers are primarily utilized for functions such as setting alarms rather than for shopping on Amazon.
A former senior employee expressed concerns about the company’s hiring practices and product development, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to the financial setbacks, Amazon CEO Andy Jassy is reportedly exploring solutions, including launching a paid version of its voice assistant. However, some engineers involved in this project are skeptical about its potential effectiveness, as detailed in the Wall Street Journal’s report.
An Amazon spokesperson emphasized the company’s commitment to providing value through its services, stating, “Our Devices & Services organization has established numerous profitable businesses for Amazon and is well-positioned to continue doing so.”
Additionally, Amazon recently showcased its new AI-powered Alexa model, but former employees assert that it is far from completion. Reports suggest the company lacks sufficient data and access to the necessary chips for operating the large language model behind the updated assistant. Furthermore, Amazon has reportedly shifted its focus towards generative AI for its cloud computing service, Amazon Web Services.
In response to criticisms from former employees regarding its AI initiatives, Amazon maintained that their insights are misguided, asserting that the Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia graphics processing units. The company reaffirmed its commitment to creating “the world’s best personal assistant” through its Alexa development.