Amazon’s strategy to generate revenue through its Alexa-enabled devices has reportedly been unsuccessful, leading to substantial financial losses for the company. According to the Wall Street Journal, internal documents and sources indicate that Amazon suffered losses exceeding $25 billion from its Echo, Kindle, and other devices between 2017 and 2021. Despite having hundreds of millions of customers, the Alexa-enabled Echo speakers are primarily used for setting alarms and utilizing free applications rather than for making purchases on Amazon.
A former senior employee at Amazon expressed concerns about the company’s initiatives, 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 actively seeking solutions, including the introduction of a paid version of the voice assistant. However, some engineers working on this project have expressed skepticism about its potential impact.
An Amazon spokesperson emphasized the company’s commitment to creating value for customers through its services rather than solely through device sales. They noted that the Devices & Services organization has successfully established several profitable ventures and is well-positioned for future success.
In addition, Amazon’s recently showcased AI-enhanced version of Alexa has been described by former employees as still far from operational. Reports suggest that the company lacks sufficient data and access to essential chips to support the large language model driving the new assistant. Furthermore, Amazon is said to have shifted its focus away from the AI-powered Alexa to prioritize generative AI developments for its cloud computing division, Amazon Web Services.
Amazon has contested the claims made by former employees, asserting that they are misinformed about the company’s current AI projects. The company stated that its Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs, reiterating its goal to build “the world’s best personal assistant.”