Amazon’s efforts to profit from its Alexa-enabled devices have reportedly resulted in significant financial losses, totaling over $25 billion from 2017 to 2021. According to internal documents and sources familiar with the situation, the company has not achieved the expected success with its Echo, Kindle, and other devices. Although Amazon boasts hundreds of millions of customers, it appears that most users primarily utilize Echo speakers for basic functions like setting alarms, rather than for shopping on the platform.
A former senior employee expressed concerns about the investment made in personnel and resources, highlighting the lack of meaningful outcomes from these devices. In response to the situation, Amazon CEO Andy Jassy is seeking solutions, including the introduction of a paid version of the Alexa voice assistant. However, some engineers involved in the project have expressed skepticism about its potential success.
An Amazon spokesperson stated that the company is focusing on delivering value through its services, not just through device sales. They emphasized that the Devices & Services organization has created numerous profitable ventures and remains poised for future success.
Additionally, the new AI-powered version of Alexa, which Amazon demonstrated in September, reportedly faces challenges, such as insufficient data and limited access to the necessary chips for operation. There are claims that Amazon has shifted its focus away from enhancing Alexa to prioritize generative AI development for its cloud computing division, Amazon Web Services.
Amazon disputes the claims made by former employees, asserting that they are misinformed about the current state of its AI initiatives. The company maintains that its Artificial General Intelligence team has access to both proprietary Trainium chips and Nvidia GPUs, reaffirming its goal of developing the best personal assistant on the market.