Amazon’s ambition to generate revenue through its Alexa-enabled devices has reportedly not yielded positive results, resulting in significant financial losses for the company. According to a report from the Wall Street Journal, internal documents and sources indicate that Amazon lost over $25 billion between 2017 and 2021 on devices such as Echo and Kindle.
Despite having hundreds of millions of customers using these devices, it appears that the Alexa-enabled Echo speakers are predominantly utilized for basic functions like setting alarms, rather than for making purchases on Amazon. A former senior employee highlighted concerns about the efficiency of the company’s approach, mentioning the hiring of a substantial workforce for what turned out to be a minimal feature.
In response to these challenges, Amazon CEO Andy Jassy is reportedly exploring solutions, including the introduction of a subscription tier for the voice assistant. However, some engineers involved in the development of this paid version express skepticism about its potential impact.
An Amazon spokesperson defended the company’s strategy, stating that it prioritizes the value created for customers using its services, rather than solely focusing on device sales. They emphasized the profitability of the Devices & Services organization and its capacity to sustain that success.
On another front, the new AI-driven version of Alexa, showcased in September, is reportedly facing delays due to a lack of necessary data and access to the appropriate hardware. According to former employees, Amazon has shifted its focus towards enhancing generative AI within its cloud services rather than pushing forward with the upgraded Alexa.
Amazon has refuted claims made by its former employees, asserting that the Amazon Artificial General Intelligence team has sufficient access to both proprietary Trainium chips and Nvidia GPUs. The company remains committed to its vision of establishing an advanced personal assistant.