Amazon’s strategy to generate revenue from its Alexa-enabled devices has reportedly resulted in significant losses for the company, totaling over $25 billion between 2017 and 2021, according to internal documents and sources familiar with the situation. Despite having hundreds of millions of customers, many users primarily utilize devices like Echo speakers for free features, such as setting alarms, rather than for making purchases on Amazon.
A former senior Amazon employee expressed concerns, 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, some engineers involved in this project are skeptical about its potential effectiveness.
An Amazon spokesperson emphasized the company’s focus on creating value through its services rather than solely through device sales, noting that the Devices & Services division has established various profitable ventures and is prepared for future success.
On another note, Amazon’s new AI-enhanced version of Alexa, which was showcased in September, is said to face significant readiness issues, as former employees claim the company lacks sufficient data and the necessary chips to support the new large language model. Moreover, Amazon is reportedly prioritizing generative AI development for its cloud computing branch, Amazon Web Services, over the AI-powered Alexa initiative.
In defense of its efforts, Amazon contends that the feedback from former employees is inaccurate and claims that its Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia graphics processing units. The company remains committed to its objective of developing the world’s best personal assistant.