Amazon’s efforts to capitalize on its Alexa-enabled devices have reportedly resulted in significant financial losses. According to internal documents and sources familiar with the situation, the online retail giant has incurred over $25 billion in losses from its Echo, Kindle, and other devices between 2017 and 2021.
Despite having hundreds of millions of customers for its devices, many users primarily utilize Alexa-enabled Echo speakers for basic functions like setting alarms rather than for shopping on Amazon. A former senior employee expressed concern about the company’s direction, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
Amazon’s CEO, Andy Jassy, is now seeking solutions, including the introduction of a paid tier for its voice assistant. However, some engineers involved in this project have expressed doubts about its potential impact, according to the Wall Street Journal.
An Amazon spokesperson highlighted the company’s focus on the value created through services, stating, “Our Devices & Services organization has established numerous profitable businesses for Amazon and is well-positioned to continue doing so going forward.”
Additionally, Amazon’s new AI-powered Alexa, showcased in September, is reportedly far from completion. Former employees indicated that the company lacks sufficient data and access to necessary chips to support the advanced technology. Furthermore, Amazon has reportedly shifted its focus from enhancing Alexa to prioritizing generative AI development for its cloud computing arm.
In response, Amazon dismissed the claims from former employees, asserting that they are misinformed about the current capabilities and resources available for its Alexa AI initiatives, including access to proprietary Trainium chips and Nvidia GPUs. The company reiterated its goal of building “the world’s best personal assistant.”