Amazon’s efforts to profit from its Alexa-enabled devices have reportedly fallen short, resulting in significant financial losses for the company. According to internal documents and sources familiar with the matter, the online retail giant suffered over $25 billion in losses from its Echo, Kindle, and other devices between 2017 and 2021. While Amazon boasts hundreds of millions of customers using its devices, its Echo speakers are primarily used for basic functions like setting alarms rather than for shopping on the platform.
A former senior employee highlighted concerns within the company, noting that despite hiring thousands, the outcome has been a simplified tool rather than a successful product. In response, Amazon CEO Andy Jassy is looking to implement changes, including the introduction of a paid version of the voice assistant. However, some engineers involved with the project have expressed skepticism about its potential impact.
An Amazon spokesperson emphasized that the focus is on the value created through customer interactions with services, not solely on device sales. They noted that the Devices & Services division has launched several profitable ventures and is poised for future success.
Additionally, the new AI-driven version of Alexa, showcased in September, is reportedly not ready for deployment, according to former employees. They indicated that Amazon lacks sufficient data and necessary chips to operate the advanced language model vital for the updated assistant. The company has also shifted its focus towards generative AI for its cloud services arm, Amazon Web Services.
In response to the criticisms, Amazon asserted that the claims from former employees are inaccurate and that the Amazon Artificial General Intelligence team has access to required resources, including proprietary chips and Nvidia GPUs, affirming its commitment to developing a top-tier personal assistant.