Amazon’s strategy to generate revenue from its Alexa-enabled products has reportedly failed, resulting in the company losing billions. Internal documents and sources cited by the Wall Street Journal indicate that from 2017 to 2021, Amazon lost over $25 billion on devices like the Echo and Kindle. Although Amazon has amassed hundreds of millions of users for these products, the Alexa-enabled Echo speakers are primarily used for basic functions such as setting alarms rather than facilitating purchases from Amazon.
A former senior employee expressed concerns about the company’s significant investment, noting the workforce increase without a corresponding return on investment. In response, Amazon CEO Andy Jassy is seeking solutions and is expected to introduce a paid version of its voice assistant. However, some engineers have doubts about the potential effectiveness of this new offering.
An Amazon spokesperson emphasized the importance of the value provided through their services rather than just device sales, mentioning that the Devices & Services division has established various profitable businesses.
In addition, Amazon’s upcoming AI-powered Alexa, showcased in September, is reportedly far from ready for launch. Former employees have pointed out that the company lacks sufficient data and the necessary hardware to support the large language model that powers the new assistant. Furthermore, Amazon has shifted its focus to developing generative AI for its cloud computing division, Amazon Web Services.
Amazon has refuted claims made by former employees, asserting that the Amazon Artificial General Intelligence team has access to both in-house chips and Nvidia GPUs. The company’s objective to create the leading personal assistant remains unchanged.