Amazon’s efforts to monetize its Alexa-enabled devices have not yielded the anticipated results, according to reports that indicate the company has incurred losses exceeding $25 billion from its Echo, Kindle, and other devices from 2017 to 2021. This information comes from internal documents and sources familiar with the situation, as reported by the Wall Street Journal. Although Amazon boasts hundreds of millions of customers relying on its devices, the Echo speakers are primarily utilized for basic functions like setting alarms and using free applications, rather than generating significant shopping revenue.
A former senior employee expressed concerns about the outcome of investments, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to this challenge, CEO Andy Jassy is reportedly exploring solutions, including the introduction of a paid tier for the voice assistant. However, engineers involved in this initiative have voiced skepticism regarding its potential effectiveness.
An Amazon spokesperson emphasized the company’s focus on the value created through service utilization rather than just device sales. The spokesperson highlighted that the Devices & Services organization has successfully established several profitable business ventures for Amazon and is poised for further growth.
In addition, reports indicate that Amazon’s newly developed artificial intelligence-powered Alexa, showcased in September, may not be fully prepared for launch. Former employees have raised concerns about the company’s lack of sufficient data and necessary chips to operate the new large language model. Furthermore, it appears that Amazon has shifted its priorities, directing attention toward generative AI for its cloud computing service, Amazon Web Services.
Amazon has countered these claims, asserting that the former employees’ statements are erroneous, stressing that the Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia graphics processing units. The company remains committed to its goal of creating “the world’s best personal assistant.”