Amazon’s strategy to profit from its Alexa-enabled devices has reportedly resulted in substantial losses, amounting to over $25 billion from 2017 to 2021, according to an article by the Wall Street Journal. The losses stem from the company’s Echo, Kindle, and other device initiatives, despite having hundreds of millions of customers using these products. Many users primarily utilize Alexa-enabled Echo speakers for tasks like setting alarms rather than shopping on Amazon.
A former senior Amazon employee expressed concerns about the investments made, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these challenges, Amazon’s CEO Andy Jassy is exploring solutions, including the introduction of a paid tier for the voice assistant. However, some engineers within the company are skeptical that this change will yield significant results.
An Amazon spokesperson emphasized the company’s focus on delivering value to customers, regardless of device sales, and noted that its Devices & Services organization has successfully established several profitable business ventures.
Additionally, despite Amazon’s recent demo of a new AI-powered Alexa in September, reports indicate that the development is far from completion. Former employees have claimed that the company lacks adequate data and access to the necessary hardware for the advanced language model that will support the updated version. Furthermore, Amazon has purportedly shifted its focus toward enhancing generative AI for its cloud services, Amazon Web Services.
In response to these criticisms, Amazon contends that these former employees are misinformed regarding the capabilities of its Alexa AI projects, asserting that the company has access to both its in-house Trainium chips and Nvidia GPUs. Amazon maintains its goal of creating “the world’s best personal assistant.”