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, the retail giant lost over $25 billion on products such as the Echo and Kindle from 2017 to 2021. Despite having hundreds of millions of customers using these devices, the primary functions of Alexa-enabled Echo speakers appear to revolve around basic tasks like setting alarms rather than driving sales on Amazon.
A former senior employee expressed concern over the company’s investments, citing, “We worried we’ve hired 10,000 people and we’ve built a smart timer,” highlighting the disconnect between investment and revenue generation.
In response, Amazon’s CEO Andy Jassy is reportedly seeking solutions and plans to introduce a paid version of its voice assistant. However, some engineers have expressed skepticism about whether this change will effectively improve the situation.
An Amazon spokesperson stated that the company aims to create value for customers using their services beyond the sale of devices, emphasizing that the Devices & Services division has developed several profitable business ventures and is poised for future success.
Meanwhile, concerns have arisen regarding the readiness of Amazon’s new AI-powered Alexa, which was demonstrated in September. Former employees indicated that the company lacks sufficient data and access to the necessary chips for the large language model supporting the upgraded assistant. Additionally, Amazon seems to have shifted focus, prioritizing generative AI development for its cloud services division, Amazon Web Services, over enhancing Alexa.
In response to these claims, Amazon asserted that former employees are misinformed about the current state of its AI projects, stating that the Amazon Artificial General Intelligence team has access to both its own Trainium chips and Nvidia GPUs. The company’s vision for Alexa, they affirmed, remains unchanged: to create the world’s best personal assistant.