Amazon’s efforts to generate revenue from its Alexa-enabled devices have reportedly resulted in significant financial losses, with the company losing over $25 billion from its Echo, Kindle, and related products between 2017 and 2021, according to internal documents and sources familiar with the situation. Despite Amazon having hundreds of millions of customers for these devices, the Echo speakers are primarily used for simple tasks such as setting alarms and utilizing free apps, rather than for shopping.
A former senior employee expressed concerns about the company’s hiring practices, noting, “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 exploring solutions, including a paid subscription service for the Alexa voice assistant. However, some engineers are skeptical about the potential impact of this new paid model.
An Amazon spokesperson emphasized the company’s focus on the value it provides through its services instead of solely relying on device sales. They pointed out that the Devices & Services sector has successfully established profitable operations and is well-positioned for continued success.
On another note, reports indicate that the new AI-enhanced version of Alexa, unveiled in September, is not yet ready for deployment. Former employees revealed that the company lacks sufficient data and the necessary technology to operate the large language model powering the updated assistant. Additionally, Amazon has reportedly shifted its focus toward developing generative AI for its cloud computing platform, Amazon Web Services.
In response to these claims, Amazon asserted that former employees are misinformed regarding the company’s 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’s objective for Alexa remains to create the world’s leading personal assistant.