Amazon’s strategy to generate revenue through its Alexa-enabled devices has reportedly resulted in significant financial losses for the company, amounting to over $25 billion from 2017 to 2021, according to the Wall Street Journal. Internal documents and sources familiar with the matter reveal that despite having hundreds of millions of customers using devices like the Echo and Kindle, these devices are primarily utilized for basic functions such as setting alarms rather than for shopping on Amazon.
A former senior employee expressed concerns over the situation, questioning the large number of hires made for a service that seems to only provide limited functionalities. Looking to address these challenges, Amazon CEO Andy Jassy is exploring the introduction of a paid version of its voice assistant. However, some engineers at the company remain skeptical about the potential impact of this new offering.
An Amazon spokesperson emphasized that the company is focused on creating value through its services rather than just device sales, claiming that its Devices & Services division has successfully established several profitable ventures.
Additionally, the company introduced a new AI-enhanced version of Alexa in September, but former employees have indicated that it is still far from completion. They noted that Amazon lacks sufficient data and access to essential chips required for the advanced language processing needed for this iteration. Furthermore, the company has reportedly shifted priorities to focus on generative AI development for Amazon Web Services.
In response to criticism from former employees, Amazon disputed their claims, stating that its Artificial General Intelligence team has access to necessary computing resources and reaffirmed its commitment to creating the leading personal assistant in the industry.