Amazon’s strategy to generate revenue from its Alexa-enabled devices has reportedly fallen short, leading to significant financial losses for the company. According to internal documents and sources familiar with the situation, the tech giant lost over $25 billion from its Echo, Kindle, and other devices between 2017 and 2021.
While Amazon has amassed hundreds of millions of customers for its devices, many users primarily utilize the Echo speakers for basic functions like setting alarms and using free applications, rather than for shopping on Amazon. A former senior employee expressed concern about the company’s direction, 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, engineers working on this initiative have expressed skepticism regarding its potential impact.
An Amazon spokesperson emphasized the company’s focus on the value provided to customers through its services, rather than solely on device sales. They noted that the Devices & Services organization has successfully established several profitable businesses and is positioned for future growth.
In addition, Amazon’s newly developed AI-powered Alexa, which was showcased in September, is reportedly not yet ready for launch. Former employees pointed out that the company lacks sufficient data and access to the necessary chips to support the advanced language model for the updated assistant. Furthermore, Amazon has allegedly shifted its priority towards enhancing generative AI for its cloud services division, Amazon Web Services.
In response to these claims, Amazon stated that criticisms from former employees were inaccurate, asserting that its Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs. The company reiterated its commitment to building the “world’s best personal assistant.”