Amazon’s ambition to profit from its Alexa-enabled devices has reportedly fallen short, resulting in significant financial losses for the company. According to the Wall Street Journal, internal documents and sources indicate that Amazon lost over $25 billion on products such as the Echo and Kindle between 2017 and 2021. Although Amazon boasts hundreds of millions of users for these devices, its Echo speakers are primarily employed for basic functions like setting alarms, rather than for shopping on the platform.
A former senior employee expressed concern, saying, “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 version of Alexa. However, there are doubts among engineers regarding the potential effectiveness of this new offering.
An Amazon spokesperson emphasized the company’s focus on the overall value delivered to customers, stating that the Devices & Services division has identified various profitable ventures and is positioned for future success.
Additionally, reports suggest that the new AI-driven version of Alexa, showcased in September, is far from ready. Former employees have indicated that Amazon lacks sufficient data and the necessary chips to support the large language model that would power this upgraded virtual assistant. The company is reportedly prioritizing generative AI developments for its cloud service, Amazon Web Services, over advancing Alexa.
Amazon has refuted claims made by former staff, asserting that they are misinformed regarding the current status of its Alexa AI projects and that the Artificial General Intelligence team has access to both their proprietary Trainium chips and Nvidia GPUs. The company’s objective for Alexa remains focused on creating “the world’s best personal assistant.”