Amazon’s initiative to generate profits 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 close to the situation revealed that Amazon incurred losses exceeding $25 billion on its Echo, Kindle, and other devices between 2017 and 2021. Despite having hundreds of millions of customers using these devices, many utilize the Echo speakers primarily for simple tasks like setting alarms, rather than engaging in shopping through Amazon.
A former senior employee voiced concerns, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In light of these setbacks, Amazon CEO Andy Jassy is seeking solutions, including the introduction of a paid version of the voice assistant. However, some engineers have expressed skepticism regarding whether this new offering will make a significant impact.
An Amazon spokesperson emphasized the company’s commitment to delivering value through its services and highlighted the profitability of its Devices & Services division. They stated, “Our Devices & Services organization has established numerous profitable businesses for Amazon and is well-positioned to continue doing so going forward.”
In addition, Amazon’s new AI-powered version of Alexa, unveiled in September, is reportedly not ready for launch. Former employees indicated that the company lacks sufficient data and access to the necessary hardware to support the advanced language model driving the upgraded assistant. Furthermore, Amazon has allegedly shifted its focus to developing generative AI capabilities for its cloud computing platform, Amazon Web Services, instead of prioritizing the AI iteration of Alexa.
In response to these assertions, Amazon countered that former employees are misinformed and confirmed that its Artificial General Intelligence team is equipped with both in-house Trainium chips and Nvidia GPUs. The company reiterated its intention to build “the world’s best personal assistant.”