Amazon’s efforts to profit from its Alexa-enabled devices have reportedly resulted in substantial financial losses, totaling over $25 billion from 2017 to 2021. According to internal documents and sources cited by the Wall Street Journal, the online retail giant’s losses stem from its Echo, Kindle, and other devices. Despite boasting hundreds of millions of customers, the use of Alexa-enabled Echo speakers appears predominantly geared toward setting alarms and using free applications rather than facilitating purchases on Amazon.
Former Amazon employees have expressed concerns about the company’s hiring practices, noting, “We worried we’ve hired 10,000 people and we’ve built a smart timer,” highlighting the disconnect between investment and user engagement in e-commerce.
In response, Amazon CEO Andy Jassy is reportedly seeking solutions and considering the introduction of a paid version of its voice assistant. However, some engineers involved in the project have expressed doubts regarding its potential effectiveness.
An Amazon spokesperson emphasized the company’s focus on creating value beyond device sales, pointing out that their Devices & Services organization has established several profitable ventures and is poised for future success.
Despite unveiling a new AI-powered version of Alexa in September, reports indicate that it is far from being fully operational. Former employees have indicated that Amazon lacks sufficient data and necessary chip access for the large language model needed for the upgraded assistant. Furthermore, Amazon has reportedly shifted its priorities to concentrate on generative AI for its cloud computing segment, Amazon Web Services.
In response to these claims, Amazon stated that former employees are misinformed about its Alexa AI initiatives, asserting that its Artificial General Intelligence team has access to the required in-house Trainium chips and Nvidia graphics processing units. The goal for Alexa, the company insists, remains to develop the world’s leading personal assistant.