Amazon’s venture into monetizing its Alexa-enabled devices has not yielded the expected financial returns, resulting in significant losses for the company. Reports indicate that Amazon incurred over $25 billion in losses from its Echo, Kindle, and other devices between 2017 and 2021, according to internal documents and sources familiar with the matter. Despite having hundreds of millions of customers for its devices, the usage of Alexa-enabled Echo speakers is primarily for basic functions like setting alarms, rather than for making purchases on Amazon.
A former senior employee expressed concern, 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 searching for solutions and is said to be introducing a paid version of its voice assistant. However, some engineers involved in the project have expressed doubts about its potential impact.
An Amazon spokesperson emphasized that the company is dedicated to creating value through its services beyond just device sales, claiming that its Devices & Services division has established numerous profitable enterprises and is well-positioned for future growth.
On a related note, Amazon’s newly unveiled artificial intelligence-powered Alexa is reportedly not ready for deployment, according to former employees. The company is said to lack sufficient data and access to the necessary chips for running the large language model underpinning the updated version of its virtual assistant. Additionally, Amazon has supposedly shifted its focus towards developing generative AI for its cloud computing service, Amazon Web Services.
In response to these assertions, Amazon disputed claims made by its former employees, stating that they are misinformed about current AI initiatives. The company claimed that its Amazon Artificial General Intelligence team has access to both in-house chips and Nvidia GPUs, reaffirming its commitment to developing the world’s best personal assistant.