Amazon’s efforts to profit from its Alexa-enabled devices have reportedly resulted in significant financial losses, totaling over $25 billion from 2017 to 2021. According to internal documents and sources cited by the Wall Street Journal, the online retail giant’s Echo, Kindle, and other devices have not met expectations. Even with hundreds of millions of customers, the Echo speakers are primarily used for basic functions like setting alarms rather than for shopping.
A former senior employee expressed concern about the situation, suggesting that despite hiring 10,000 staff, the outcome has been underwhelming. In response, CEO Andy Jassy is exploring solutions, including the introduction of a paid tier for Alexa. However, some engineers are skeptical about its potential success.
An Amazon spokesperson stated that the company is focused on providing value through its services beyond just device sales. The spokesperson highlighted that the Devices & Services division has created numerous profitable ventures and is positioned for future success.
Additionally, Amazon’s latest AI-powered version of Alexa, which was showcased in September, is reportedly not ready for launch, as former employees indicated issues with data availability and the necessary technology. The company has also shifted priorities toward developing generative AI for its cloud computing division, Amazon Web Services.
Amazon has denied claims made by its former employees, asserting that its Artificial General Intelligence team has access to both its proprietary Trainium chips and Nvidia GPUs. The company’s goal for Alexa remains clear: to develop the leading personal assistant in the market.