Amazon’s ambition to profit from its Alexa-enabled devices is reportedly falling flat, leading to significant financial losses for the company. According to internal documents and sources cited by the Wall Street Journal, the tech giant has incurred over $25 billion in losses from its Echo, Kindle, and other related products between 2017 and 2021. Despite having hundreds of millions of devices in circulation, users primarily rely on Amazon’s Echo speakers for basic functions like setting alarms rather than making purchases.
A former senior Amazon employee expressed concerns over the company’s substantial investment in personnel and resources, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to these challenges, Amazon’s CEO Andy Jassy is reportedly seeking solutions, including the introduction of a paid version of the voice assistant. However, some engineers involved in this project are skeptical about its potential effectiveness.
An Amazon spokesperson emphasized the company’s commitment to delivering value through its services, stating, “Our Devices & Services organization has established numerous profitable businesses for Amazon and is well-positioned to continue doing so going forward.”
In addition, Amazon’s latest AI-enhanced version of Alexa, showcased in September, is facing its own setbacks. Former employees claim that the new assistant is far from ready due to insufficient data and a lack of access to the necessary chips for running its large language model. The company has reportedly shifted its focus to developing generative AI for its cloud unit, Amazon Web Services.
Amazon has rebutted claims from former employees, asserting that their insights are misguided regarding the current status of Alexa’s AI capabilities. The company maintains that its Artificial General Intelligence team has the required resources, including proprietary Trainium chips and Nvidia GPUs. Amazon reiterated its goal to create “the world’s best personal assistant.”