Amazon’s initiative to generate revenue through its Alexa-enabled devices has reportedly turned into a costly venture, resulting in significant financial losses for the company. Internal documents and sources have indicated that from 2017 to 2021, Amazon lost over $25 billion on its Echo, Kindle, and other devices.
Despite having hundreds of millions of customers, the primary use for Amazon’s Alexa-enabled Echo speakers appears to be for setting alarms and utilizing free applications, rather than facilitating purchases on Amazon.
A former senior employee expressed concern about the company’s direction, 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 subscription tier for its voice assistant. However, some engineers involved in this paid version are skeptical about its potential impact.
An Amazon spokesperson emphasized the company’s focus on creating value through its services beyond merely selling devices. The spokesperson noted that the Devices & Services division has successfully established several profitable ventures and is positioned to continue this trend.
Additionally, Amazon’s newly unveiled AI-driven Alexa, which was demonstrated in September, is said to be far from ready, according to former employees. The company is reportedly facing challenges regarding the availability of necessary data and the chips required to operate the new large language model guiding the revamped assistant. Furthermore, Amazon has shifted its focus toward developing generative AI for its cloud computing arm, Amazon Web Services, rather than advancing AI for Alexa.
Amazon has refuted claims made by former employees, stating that they are misinformed about the company’s ongoing AI developments. The company claims its Amazon Artificial General Intelligence team has access to both proprietary Trainium chips and Nvidia GPUs. Amazon remains committed to its ambition of creating “the world’s best personal assistant.”