Amazon’s strategy to generate revenue from its Alexa-enabled devices has reportedly fallen short, with the company facing significant financial losses. According to internal documents and sources cited by the Wall Street Journal, Amazon lost over $25 billion from its Echo, Kindle, and other devices between 2017 and 2021. Although the company boasts hundreds of millions of customers using its devices, the majority reportedly utilize the Alexa-enabled Echo speakers primarily for setting alarms and accessing free applications rather than making purchases.
A former senior Amazon employee expressed concerns over the company’s investments, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In an effort to turn the tide, Amazon CEO Andy Jassy is exploring the introduction of a paid version of the voice assistant. However, sources indicated that some engineers involved with the new Alexa are skeptical about its potential effectiveness.
An Amazon spokesperson stated, “We are focused on the value we create when customers use our services, not just when they buy our devices.” They emphasized that the Devices & Services organization has established several profitable ventures and is poised for continued success.
Additionally, concerns have been raised about Amazon’s new AI-powered version of Alexa, which was showcased in September. Former employees claim it is far from ready, citing insufficient data and a lack of access to necessary chips to support the new large language model. Reports also suggest that the focus has shifted towards generative AI development for Amazon Web Services, leading to the deprioritization of the AI-enhanced Alexa.
In response to these claims, Amazon insisted that former employees are misinformed regarding the current status of Alexa AI initiatives, asserting that its Amazon Artificial General Intelligence team has access to both Trainium chips and Nvidia graphics processing units. The company reiterated its commitment to developing “the world’s best personal assistant.”