Amazon’s initiative to generate revenue through its Alexa-enabled devices has reportedly not succeeded and is instead costing the company billions. According to the Wall Street Journal, internal documents reveal that Amazon incurred losses exceeding $25 billion from its Echo, Kindle, and other devices between 2017 and 2021. Although the company has hundreds of millions of customers for its devices, the Alexa-enabled Echo speakers are primarily utilized for basic functions like setting alarms and operating free apps, rather than for shopping on Amazon.
A former senior Amazon employee expressed concern, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response, Amazon CEO Andy Jassy is reportedly seeking solutions and is set to introduce a paid version of its voice assistant. However, some engineers developing this paid version are reportedly skeptical about its potential to make a significant impact.
An Amazon representative emphasized that the company prioritizes the value created when customers use its services, not solely when they purchase devices. They noted that the Devices & Services division has successfully established various profitable ventures for Amazon and is expected to continue this trend.
Additionally, Amazon’s recently showcased AI-driven Alexa is reportedly far from ready, as former employees indicate the company lacks sufficient data and access to the necessary chips to operate the advanced language model supporting the new virtual assistant. It has also been claimed that Amazon has shifted its focus from AI-powered Alexa to enhancing generative AI capabilities for its cloud computing branch, Amazon Web Services.
Amazon has countered these claims, asserting that the opinions of its former employees are inaccurate and that its Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs. The company’s objective for Alexa continues to be building the “world’s best personal assistant.”