Amazon’s initiative to generate revenue through its Alexa-enabled devices has reportedly not been fruitful, leading the company to incur billions in losses. According to a report from the Wall Street Journal, internal documents reveal that from 2017 to 2021, the online retail giant lost over $25 billion from its Echo, Kindle, and other devices. Although Amazon has attracted hundreds of millions of customers for its devices, customers predominantly use the Alexa-enabled Echo speakers for setting alarms and accessing free apps, rather than making purchases on Amazon.
One former senior Amazon employee expressed concern about the focus of the workforce, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these challenges, Amazon CEO Andy Jassy is reportedly seeking solutions, including the launch of a paid tier for its voice assistant. However, some engineers involved in the development of this paid version have expressed doubts about its potential effectiveness.
An Amazon spokesperson emphasized the company’s commitment to providing value beyond device sales, stating, “Our Devices & Services organization has established numerous profitable businesses for Amazon and is well-positioned to continue doing so going forward.”
In addition, the new AI-powered version of Alexa, which Amazon showcased in September, is said to be far from readiness, according to former employees. Concerns have been raised regarding the lack of data and the necessary chips to operate the large language model driving the new version of the virtual assistant. Reports indicate that Amazon has shifted focus away from AI-powered Alexa to concentrate on enhancing generative AI within its cloud computing division, Amazon Web Services.
However, Amazon counters these claims, asserting that former employees are mistaken about its current AI initiatives. The company maintains that its Artificial General Intelligence team has access to essential in-house Trainium chips and Nvidia graphics processing units (GPUs). Amazon’s objectives for Alexa remain clear: to develop the world’s best personal assistant.