Amazon’s strategy to monetize its Alexa-enabled devices has reportedly fallen short, resulting in significant financial losses for the company. According to internal documents and sources familiar with the matter, Amazon incurred losses exceeding $25 billion from its Echo, Kindle, and other devices between 2017 and 2021. Despite having hundreds of millions of customers, Amazon’s Echo speakers are primarily used for basic tasks like setting alarms rather than shopping.
A former senior employee expressed concerns over the company’s direction, 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 exploring solutions, including the introduction of a paid tier for Alexa. However, some engineers involved in this project are skeptical about its potential success.
An Amazon spokesperson emphasized the company’s focus on the value created by its services rather than just device sales. They claimed that the Devices & Services division has established several profitable ventures and is poised for continued success.
In addition, Amazon’s new AI-powered version of Alexa, showcased in September, is reported to be far from completion. Former employees noted that the company lacks sufficient data and the necessary chips to support the large language model driving the new assistant. Furthermore, Amazon is reportedly prioritizing generative AI development for its cloud computing arm, Amazon Web Services, over enhancing Alexa.
In response to these claims, Amazon has stated that its former employees are misinformed regarding the current state of its AI efforts. The company asserts that the Amazon Artificial General Intelligence team has access to critical resources, including in-house Trainium chips and Nvidia GPUs, and remains committed to building “the world’s best personal assistant.”