Amazon’s initiative to generate revenue through its Alexa-enabled devices has reportedly not yielded the expected results, resulting in significant financial losses for the company.
According to a report from the Wall Street Journal, Amazon has lost over $25 billion on its Echo, Kindle, and other devices between 2017 and 2021, based on internal documents and insights from unnamed sources. Despite having hundreds of millions of customers, it appears that users primarily utilize the Alexa-enabled Echo speakers for simple tasks such as setting alarms rather than for making purchases on Amazon.
A former senior employee highlighted concerns within the company, 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 seeking solutions and is reportedly set to introduce a paid version of the voice assistant. However, some engineers involved in this project are skeptical about its potential impact, according to the Wall Street Journal.
An Amazon spokesperson emphasized the company’s focus on the value delivered through its services rather than solely on device sales. “Our Devices & Services organization has established numerous profitable businesses for Amazon and is well-positioned to continue doing so going forward,” the representative noted.
In addition, Amazon’s new AI-enhanced Alexa, which was showcased in September, is said to be far from completion, as per accounts from former employees. The company reportedly lacks adequate data and the necessary chips to support the large language model (LLM) that will drive the updated virtual assistant. Furthermore, Amazon has reportedly shifted its attention away from AI-powered Alexa to prioritize generative AI development for its cloud computing division, Amazon Web Services.
In response to these claims, Amazon stated that the views of former employees were incorrect and uninformed regarding its current AI initiatives for Alexa. The company affirmed that its Artificial General Intelligence team has access to both its proprietary Trainium chips and Nvidia graphics processing units (GPUs), maintaining that the objective for Alexa is to “build the world’s best personal assistant.”