Amazon’s efforts to generate revenue from its Alexa-enabled devices have reportedly been unsuccessful, leading to significant financial losses for the company. According to an internal analysis cited by the Wall Street Journal, Amazon lost over $25 billion between 2017 and 2021 from its devices such as the Echo and Kindle. Despite having hundreds of millions of customers, research indicates that these devices are primarily used for basic functions like setting alarms rather than for shopping on Amazon.
A former Amazon executive expressed concern over the workforce expansion, 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 solutions, including the launch of a paid version of its voice assistant. However, some engineers are skeptical about this initiative’s potential effectiveness.
An Amazon spokesperson emphasized that the company focuses on the overall value created for customers, not just device sales, highlighting their Devices & Services division’s successful ventures.
Meanwhile, Amazon’s latest AI-powered Alexa, showcased in September, appears to be significantly behind schedule. Former employees indicate that the company lacks sufficient data and access to the necessary chips to support the advanced language model for the new assistant. Additionally, Amazon has supposedly shifted its priorities to concentrate on generative AI for its cloud service, Amazon Web Services, rather than advancing Alexa.
In response to these claims, Amazon has stated that its former employees hold inaccurate views about its AI capabilities and confirmed that its Artificial General Intelligence team has access to essential resources, including in-house chips and Nvidia GPUs. The company reaffirmed its commitment to developing what it aims to be the world’s best personal assistant.