Amazon’s strategy to generate revenue from its Alexa-enabled devices has reportedly resulted in significant financial losses, costing the company over $25 billion from 2017 to 2021. According to the Wall Street Journal, internal documents and sources indicate that, despite having hundreds of millions of customers, most users primarily utilize Echo speakers for setting alarms and accessing free applications rather than shopping on Amazon.
A former senior Amazon employee expressed concerns, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to the losses, CEO Andy Jassy is seeking solutions, including the introduction of a paid version of Alexa. However, some engineers within the company are skeptical about the potential effectiveness of this paid tier.
An Amazon spokesperson emphasized that the company is focused on the value delivered to customers through its services rather than solely on device sales, noting that its Devices & Services division has established several profitable ventures.
In a related development, Amazon’s new AI-powered Alexa, which was showcased in September, is reportedly not yet fully operational. Former employees have raised concerns that the company lacks sufficient data and access to necessary chips to support the advanced language model behind the updated virtual assistant. Additionally, Amazon is said to have shifted its focus towards enhancing generative AI for its cloud computing segment, Amazon Web Services.
In response to these criticisms, Amazon has stated that the accounts of its former employees are inaccurate, asserting that the Amazon Artificial General Intelligence team has access to both proprietary Trainium chips and Nvidia GPUs. The company reiterated its commitment to developing the best personal assistant available.