Amazon’s strategy to profit from its Alexa-enabled devices appears to be faltering, with reports indicating that the company has incurred losses exceeding $25 billion between 2017 and 2021. Internal documents and sources familiar with the situation have revealed that while Amazon boasts hundreds of millions of customers for its devices, its Echo speakers are primarily used for basic functions such as setting alarms rather than for shopping purposes.
A former senior employee expressed concerns about the company’s investments, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In light of these losses, Amazon CEO Andy Jassy is seeking a solution and is said to be introducing a paid version of the voice assistant. However, some engineers involved in this project have doubts about its potential impact.
An Amazon spokesperson emphasized the company’s focus on creating value through the usage of its services, not solely through device sales. They claimed that the Devices & Services division has successfully established several profitable ventures that are poised for future growth.
On another note, Amazon’s latest AI-enhanced version of Alexa, showcased in September, is reportedly not ready for launch, according to previous employees. The company lacks sufficient data and the necessary chips to support the advanced language model required for the new assistant. Furthermore, it seems that Amazon has shifted its attention towards generative AI development for its cloud services arm, Amazon Web Services.
In response to these allegations, Amazon dismissed the claims from former employees, asserting that the Amazon Artificial General Intelligence team has access to essential resources, including in-house Trainium chips and Nvidia GPUs. The company reiterated its commitment to enhancing Alexa as a leading personal assistant in the market.