Amazon’s efforts to generate revenue from its Alexa-enabled devices have reportedly fallen short, resulting in significant financial losses for the company. According to internal documents cited by the Wall Street Journal, Amazon lost more than $25 billion on devices such as the Echo and Kindle between 2017 and 2021. Although Amazon boasts hundreds of millions of customers using its devices, the Echo speakers are mainly utilized for basic functions like setting alarms, rather than making purchases on Amazon.
A former senior employee expressed concern, 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 seeking solutions, with plans to introduce a paid tier for the voice assistant. However, some engineers working on this version of Alexa have expressed skepticism about its potential impact.
An Amazon spokesperson emphasized the company’s focus on the overall value created for customers using its services beyond just device sales, claiming that its Devices & Services organization has established numerous profitable ventures and is well-positioned for continued success.
On another note, the upcoming AI-powered version of Alexa, which Amazon showcased in September, is reportedly far from completion, according to former employees. The company lacks sufficient data and necessary chips to support the large language model driving the new assistant. Furthermore, Amazon has allegedly shifted its focus away from the AI version of Alexa to concentrate on developing generative AI for its cloud services division, Amazon Web Services.
In response to these claims, Amazon contended that its former employees are misinformed about current AI initiatives, asserting that the Amazon Artificial General Intelligence team has access to necessary Trainium chips and Nvidia GPUs. The company’s objective for Alexa remains unchanged: to develop the world’s leading personal assistant.