Amazon’s initiative to profit from its Alexa-enabled devices has reportedly fallen short, resulting in significant financial losses for the company. According to internal documents and sources cited by the Wall Street Journal, Amazon lost over $25 billion from its Echo, Kindle, and other devices between 2017 and 2021. Although the company boasts hundreds of millions of customers for its gadgets, its Echo speakers, which are powered by Alexa, are primarily used for tasks such as setting alarms and utilizing free applications rather than facilitating purchases on Amazon.
A former senior Amazon employee expressed concern about the company’s decisions, 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 exploring solutions, including the launch of a paid version of its voice assistant. However, sources have indicated that some engineers involved in developing this paid Alexa version are skeptical about its potential success.
An Amazon representative asserted that the company prioritizes the value created when customers engage with its services, not just when they purchase devices. They noted that Amazon’s Devices & Services division has created numerous profitable ventures and is poised to continue this trajectory.
On a related note, Amazon’s newly developed AI-powered Alexa, showcased last September, is reportedly not yet ready for deployment, according to former employees. The company is said to lack sufficient data and access to the necessary chips for the large language model powering its updated virtual assistant. Sources revealed that Amazon has also shifted its focus away from AI for Alexa to prioritize generative AI for its cloud computing division, Amazon Web Services.
Amazon refuted claims made by former employees, stating that they are misinformed regarding its current AI efforts and emphasizing that the Amazon Artificial General Intelligence team has access to both proprietary Trainium chips and Nvidia GPUs. The company reassured that its goal remains unchanged: to create the world’s best personal assistant.