Amazon’s attempts to profit from its Alexa-enabled devices have reportedly fallen short, resulting in significant financial losses for the company. According to an internal report cited by the Wall Street Journal, Amazon lost over $25 billion on devices such as the Echo and Kindle between 2017 and 2021. Despite the extensive customer base using these devices, Alexa’s primary functions appear to be limited to setting alarms and utilizing free applications, rather than driving purchases on Amazon.
A former senior Amazon employee expressed concerns about the company’s workforce and technological investments, 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 exploring new strategies, including the introduction of a paid version of its voice assistant. However, some engineers within the company express doubts about the potential effectiveness of this paid tier.
An Amazon spokesperson emphasized the company’s commitment to creating value for customers beyond device sales, highlighting that its Devices & Services division has successfully established profitable ventures and is poised for future success.
Meanwhile, Amazon’s upgraded AI-driven version of Alexa, unveiled in September, is reportedly not progressing as expected. Former employees noted that the company lacks sufficient data and access to the necessary chips to support the advanced large language model for the new assistant. Amazon has also shifted its focus toward developing generative AI for its cloud services division, Amazon Web Services.
In contrast, Amazon refuted claims from former employees, asserting that they are misinformed about current developments in Alexa AI. The company maintains that its Artificial General Intelligence team has access to both its proprietary Trainium chips and Nvidia GPUs, with ongoing plans to position Alexa as the premier personal assistant in the market.