Amazon’s efforts to monetize its Alexa-enabled devices have reportedly fallen short, leading to substantial financial losses for the company. According to a report from the Wall Street Journal, Amazon lost more than $25 billion on its Echo, Kindle, and other devices between 2017 and 2021, based on internal documents and sources familiar with the situation. While the company has amassed hundreds of millions of customers for its devices, Echo speakers are primarily used for basic functions like setting alarms rather than facilitating purchases on Amazon.
A former senior Amazon employee expressed concern, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
To address the issue, Amazon CEO Andy Jassy is reportedly seeking solutions, including the launch of a paid version of its voice assistant. However, some engineers involved in the paid version of Alexa have expressed doubts about its potential impact, according to the Wall Street Journal.
An Amazon spokesperson emphasized the company’s focus on creating value for customers using its services beyond just device purchases, stating that its Devices & Services organization has built several profitable businesses and is poised for future success.
In the meantime, Amazon’s upcoming AI-powered Alexa, which was unveiled in September, is reportedly not nearing readiness. Former employees indicated that the company lacks sufficient data and access to the necessary chips to operate the large language model that underpins the new version of the assistant. Additionally, Amazon has reportedly shifted its focus towards developing generative AI for its cloud computing unit, Amazon Web Services.
Contrary to these claims, Amazon contends that its former employees are misinformed about its current AI initiatives. The company asserts that its Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs, maintaining that the goal remains to create the world’s premier personal assistant.