Amazon’s strategy to profit from its Alexa-enabled devices appears to be falling short, with reports indicating the company has incurred losses of over $25 billion from its Echo, Kindle, and other devices between 2017 and 2021. Internal documents and sources familiar with the situation reveal that while Amazon boasts hundreds of millions of customers for its devices, the Alexa-enabled Echo speakers are primarily used for simple tasks such as setting alarms instead of facilitating purchases.
A former senior Amazon employee expressed concerns, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these challenges, Amazon CEO Andy Jassy is seeking solutions, reportedly planning to introduce a paid version of its voice assistant. However, some engineers involved in this initiative have raised doubts about its potential success.
An Amazon spokesperson emphasized the company’s commitment to creating 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.”
On another front, Amazon’s upcoming AI-driven version of Alexa, which was showcased in September, is reportedly not yet ready. Former employees have indicated that the company lacks sufficient data and access to the necessary hardware to operate the large language model powering this version of the assistant. Additionally, Amazon has reportedly shifted focus towards generative AI for its cloud computing division, Amazon Web Services.
In response to these claims, Amazon discredited the former employees as being misinformed regarding its Alexa AI efforts, asserting that its Artificial General Intelligence team does have access to both in-house Trainium chips and Nvidia GPUs. The company maintains that its goal for Alexa remains unchanged: to develop the world’s leading personal assistant.