Amazon’s efforts to profit from its Alexa-enabled devices have reportedly failed, leading to significant losses. According to a report by the Wall Street Journal, the online retail giant lost over $25 billion from its Echo, Kindle, and other devices between 2017 and 2021, based on internal documents and anonymous sources.
Despite having hundreds of millions of customers using these devices, many primarily utilize Alexa-enabled Echo speakers for setting alarms and accessing free apps rather than for shopping on Amazon. A former senior employee raised concerns, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response, Amazon CEO Andy Jassy is reportedly seeking solutions, including a potential launch of a paid version of its voice assistant. However, concerns from some engineers suggest that this may not significantly impact the situation.
An Amazon spokesperson emphasized the company’s commitment to creating value for customers beyond just device sales, noting that the Devices & Services organization has successfully established numerous profitable businesses and will continue to do so.
Meanwhile, Amazon’s newly demoed AI-powered Alexa, which was presented in September, is allegedly not close to being operational. Former employees claim that the company lacks sufficient data and access to the necessary chips for the large language model driving the new assistant. Additionally, reports indicate that Amazon has shifted focus toward developing generative AI for its cloud services division, Amazon Web Services.
In response to these claims, Amazon refuted the accuracy of the former employees’ statements, asserting that the Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs. The company maintains that its objective for Alexa remains unchanged: to create the world’s most effective personal assistant.