Amazon’s strategy to generate revenue from its Alexa-enabled devices has reportedly fallen short, leading the company to incur losses amounting to over $25 billion between 2017 and 2021, according to internal documents reviewed by the Wall Street Journal. Despite having hundreds of millions of customers, it appears that Amazon’s Echo speakers are predominantly used for basic tasks like setting alarms rather than for making purchases.
A former senior employee expressed concerns about the company’s workforce, saying, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these challenges, Amazon CEO Andy Jassy is exploring a solution by introducing a paid tier for its voice assistant. However, there are indications from some engineers that this initiative may not yield the desired results.
An Amazon spokesperson commented on the company’s approach, stating, “We’re focused on the value we create when customers use our services, not just when they buy our devices.” They emphasized that the Devices & Services division has developed several profitable ventures and is well-equipped to maintain that trajectory.
At the same time, reports suggest that the new AI-powered version of Alexa, showcased by Amazon last September, may not be ready for deployment. Former employees have pointed out that the company lacks sufficient data and access to the necessary technology to support the advanced AI model. Additionally, Amazon has shifted some of its focus towards generative AI developments within its cloud computing division, Amazon Web Services.
In response to these claims, Amazon stated that former employees are mistaken regarding the company’s current AI initiatives, noting that its Artificial General Intelligence team has access to critical technology, including in-house chips and Nvidia GPUs. The company reaffirmed its commitment to developing “the world’s best personal assistant” through Alexa.