Amazon’s efforts to profit from its Alexa-enabled devices have reportedly resulted in significant financial losses, with the company losing over $25 billion from its Echo, Kindle, and other devices between 2017 and 2021, according to internal documents and sources familiar with the situation. While Amazon boasts hundreds of millions of customers for these devices, its Echo speakers are often used primarily for setting alarms and accessing free applications rather than for making purchases on the platform.
Concerns have arisen within the company, as one former senior employee remarked on the disparity between the headcount increases and the product functionality, likening its employees’ work to building a sophisticated timer.
In response to these challenges, CEO Andy Jassy is reportedly seeking solutions and is planning to introduce a paid version of Alexa. However, some engineers have expressed skepticism about the potential effectiveness of this paid feature.
An Amazon spokesperson emphasized the company’s focus on creating value through services beyond merely selling devices, highlighting the establishment of multiple profitable business avenues.
In developments related to AI, Amazon’s new AI-infused version of Alexa, unveiled in September, is said to be far from completion, lacking sufficient data and the necessary chips for its advanced language model. The company has also shifted its focus towards generative AI solutions for its Amazon Web Services cloud computing division.
Nevertheless, Amazon has refuted claims from former employees regarding its AI initiatives, asserting that its Artificial General Intelligence team has access to the required chips and remains committed to its goal of developing the world’s premier personal assistant.