Amazon’s efforts to profit from its Alexa-enabled devices have reportedly failed, resulting in substantial losses for the company. According to internal documents and sources familiar with the situation, Amazon lost over $25 billion on its Echo, Kindle, and other devices between 2017 and 2021. Despite having hundreds of millions of customers, the Echo speakers are frequently used for basic functions like setting alarms rather than for shopping on Amazon.
A former senior Amazon employee noted the disappointment, saying, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these financial setbacks, Amazon CEO Andy Jassy is exploring solutions, which may include launching a paid version of the voice assistant. However, some engineers involved with this project are skeptical about its potential effectiveness.
An Amazon spokesperson emphasized the company’s focus on the value generated through customer engagement with its services, stating that its Devices & Services organization has successfully established profitable ventures and is well-equipped for future success.
Furthermore, a new AI-powered version of Alexa that Amazon showcased in September is reportedly not yet ready, according to former employees. The company appears to lack sufficient data and access to the necessary technology to support the large language model (LLM) for the new assistant. Additionally, Amazon has shifted priorities to develop generative AI for its cloud computing branch, Amazon Web Services.
In response to these concerns, Amazon claimed that its former employees are misinformed regarding its capabilities, asserting that the Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs. The company reiterated its commitment to developing “the world’s best personal assistant” through its Alexa initiative.