Amazon’s endeavor to generate revenue from its Alexa-enabled devices has reportedly not succeeded and is instead costing the company billions. According to a report from the Wall Street Journal, internal documents reveal that Amazon incurred losses exceeding $25 billion from devices like the Echo and Kindle between 2017 and 2021. Despite boasting hundreds of millions of customers, the use of Echo speakers is primarily for basic functions such as setting alarms rather than for 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 seeking solutions, including the launch of a paid tier of its voice assistant. However, some engineers working on this version of Alexa are skeptical about its potential effectiveness.
An Amazon spokesperson reaffirmed the company’s focus on providing value through its services beyond just device sales, noting that its Devices & Services division has successfully established many profitable avenues.
Meanwhile, reports indicate that Amazon’s newly developed AI-powered Alexa, showcased in September, is far from completion. Former employees claim that the company lacks sufficient data and access to the necessary chips for running the large language model that underpins this new assistant. Additionally, Amazon has shifted its priorities towards developing generative AI for its cloud computing segment, Amazon Web Services.
In response, Amazon disputed claims made by former employees, stating that they are misinformed about the current state of its Alexa AI initiatives and confirming that the Amazon Artificial General Intelligence team possesses access to both Trainium chips and Nvidia GPUs. The company maintains that its goal remains to create the best personal assistant in the world.