Amazon’s efforts to profit from its Alexa-enabled devices have reportedly resulted in substantial financial losses, with the company losing over $25 billion from its Echo, Kindle, and other devices between 2017 and 2021, according to internal documents and sources familiar with the situation. While the retail giant boasts hundreds of millions of customers using its devices, the Echo speakers are primarily utilized for basic functions like setting alarms rather than for making purchases on Amazon.
In light of these setbacks, CEO Andy Jassy is seeking solutions and is said to be launching a paid version of the voice assistant. However, concerns have been raised among some engineers involved in this effort, with doubts about its potential impact.
An Amazon spokesperson stated that the company is concentrating on the value created through customer interactions with its services rather than just sales of devices. They emphasized that the Devices & Services division has established multiple profitable ventures and is poised for future success.
In addition, reports indicate that Amazon’s new AI-powered version of Alexa, showcased in September, is far from ready. Former employees noted that the company lacks sufficient data and hardware resources to support the advanced language model behind the new assistant. Furthermore, Amazon is reportedly prioritizing the development of generative AI for its Amazon Web Services over its AI-powered Alexa.
Amazon has countered claims from former employees, asserting that they are misinformed about the current AI initiatives. The company has access to both in-house Trainium chips and Nvidia graphics processing units (GPUs), and insists that its objective to create the world’s premier personal assistant remains unchanged.