Amazon’s efforts to profit from its Alexa-enabled devices have reportedly not been successful, leading to significant financial losses for the company. According to the Wall Street Journal, internal documents reveal that Amazon lost over $25 billion on its Echo, Kindle, and other devices from 2017 to 2021. While the tech giant has hundreds of millions of customers using these devices, the Echo speakers are primarily utilized for tasks like setting alarms rather than shopping on Amazon.
A former senior employee expressed concerns about the situation, saying, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to the financial setbacks, Amazon CEO Andy Jassy is seeking solutions, including the introduction of a paid tier for its voice assistant. However, some engineers reportedly fear that this change might not yield the desired results.
An Amazon spokesperson stated, “We are focused on the value we create when customers use our services, not just when they buy our devices.” They emphasized that their Devices & Services division has established several profitable ventures for the company and is positioned for future success.
Additionally, Amazon’s new AI-powered version of Alexa, which was showcased in September, is said to be far from ready. Sources indicate that the company lacks sufficient data and the necessary chips to support the large language model required for the upgraded assistant. Reports suggest that Amazon has shifted its focus towards generative AI for its cloud computing division, Amazon Web Services, instead of prioritizing the AI-powered Alexa.
In response, Amazon has refuted claims made by former employees, asserting that their assertions about Alexa’s AI development are incorrect. The company maintains that its Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs, reaffirming its commitment to creating the best personal assistant possible.