Amazon’s attempts to generate revenue through its Alexa-enabled devices have reportedly resulted in substantial financial losses, amounting to over $25 billion from 2017 to 2021. This information was disclosed by the Wall Street Journal based on internal documents and insights from unnamed sources.
Although Amazon has amassed hundreds of millions of customers for its devices, the Alexa-enabled Echo speakers are predominantly utilized for basic functions like setting alarms and using free applications, rather than for shopping on Amazon itself. A former senior Amazon employee expressed concerns about the situation, noting the company’s investment in expanding its workforce without seeing a return on their innovations.
In response to these challenges, Amazon CEO Andy Jassy is reportedly seeking solutions, including the introduction of a paid version of the voice assistant. However, some engineers at the company have expressed skepticism about whether this will significantly change current dynamics.
An Amazon spokesperson stated that the company prioritizes the value created when customers use their services, rather than solely focusing on device sales. They emphasized that the Devices & Services division has established several profitable ventures and is well-positioned for future success.
Additionally, Amazon unveiled its new AI-powered version of Alexa in September, but former employees have claimed that it is still far from readiness. They indicated that the company lacks sufficient data and necessary chip access to support the new large language model behind the advanced virtual assistant. Moreover, reports suggest that Amazon is shifting its focus toward developing generative AI for its cloud computing division, Amazon Web Services.
In response to these criticisms, Amazon asserts that its former employees are misinformed regarding its current AI initiatives and maintains that the Amazon Artificial General Intelligence team has appropriate access to required resources for advancement. The company reaffirmed its commitment to creating the best personal assistant in the market.