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 the Wall Street Journal, internal documents reveal that Amazon incurred over $25 billion in losses from its Echo, Kindle, and other devices between 2017 and 2021. Despite having hundreds of millions of customers for its devices, the Alexa-enabled Echo speakers are mostly being used for simple tasks like setting alarms instead of shopping on Amazon.
A former senior 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 reportedly exploring solutions, including the introduction of a paid version of the voice assistant. However, some engineers working on this version have doubts about its potential impact.
An Amazon spokesperson emphasized that the company is concentrating on the value provided through its services, not just on device sales, noting that its Devices & Services organization has successfully established various profitable ventures that are expected to continue thriving.
On another front, the development of Amazon’s new AI-powered Alexa, which was showcased recently, is said to be far from completion. Former employees indicate that the company lacks sufficient data and access to the necessary chips to operate the large language model driving the updated assistant. Furthermore, Amazon is reportedly prioritizing generative AI development for its cloud computing division, Amazon Web Services, over the new iteration of Alexa.
In response to these claims, Amazon has asserted that its former employees are misinformed about the progress of its Alexa AI initiatives, stating that the Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia graphics processing units. The company maintains that its goal is to create the world’s best personal assistant.