Amazon’s strategy to generate revenue from its Alexa-enabled devices has reportedly fallen short, leading to substantial losses for the company. According to internal documents and sources cited by the Wall Street Journal, Amazon lost over $25 billion on products like the Echo and Kindle from 2017 to 2021. Although the company boasts hundreds of millions of customers using these devices, many utilize them primarily for basic functions like setting alarms, rather than for shopping 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, CEO Andy Jassy is seeking solutions, including the introduction of a paid tier for the voice assistant. However, some engineers at Amazon are skeptical about whether this change will have a meaningful impact.
An Amazon spokesperson commented, “We focus on the value we create when customers use our services, not just when they buy our devices,” emphasizing that the company’s Devices & Services division has successfully established profitable ventures and is positioned for continued success.
In addition, Amazon’s newly introduced AI-powered Alexa, which was showcased in September, is reportedly not ready for launch, according to former employees. They claim the company lacks the necessary data and access to the chips required for the large language model that underpins the updated virtual assistant. Instead, Amazon has shifted its focus toward developing generative AI for its cloud computing service, Amazon Web Services.
Amazon has disputed the claims made by its former staff, asserting that the Amazon Artificial General Intelligence team has full access to both its proprietary Trainium chips and Nvidia GPUs. The company remains committed to its goal of creating the “world’s best personal assistant.”