Amazon’s efforts to profit from its Alexa-enabled devices have reportedly resulted in substantial financial losses, amounting to over $25 billion between 2017 and 2021, according to internal documents and sources familiar with the situation. Despite having hundreds of millions of customers using devices like the Echo and Kindle, it appears that many users primarily utilize the Echo speakers for simple tasks such as setting alarms rather than shopping on Amazon.
A former senior Amazon employee expressed concerns about the company’s direction, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these challenges, CEO Andy Jassy is exploring a potential paid tier for Alexa. However, some engineers reportedly doubt that this change will significantly impact the situation.
An Amazon spokesperson emphasized the company’s focus on the value generated by its services beyond device sales, claiming that its Devices & Services division has established multiple profitable businesses and is well-positioned for future success.
In addition, Amazon’s new AI-enhanced version of Alexa, showcased in September, is reportedly far from completion, according to former employees. They cited a lack of data and insufficient access to the necessary technology to support the advanced language model behind the updated assistant. There are also reports that the company has shifted its priorities towards generative AI development for its cloud computing division, Amazon Web Services.
Amazon has refuted claims made by former employees, asserting that they are misinformed regarding its Alexa AI projects. The company maintains that its Artificial General Intelligence team has access to the required in-house chips and Nvidia graphics processing units, reiterating its commitment to building the world’s best personal assistant.