Amazon’s efforts to profit from its Alexa-enabled devices have reportedly faltered, leading to significant financial losses for the company, amounting to over $25 billion from 2017 to 2021. According to internal documents and sources familiar with the situation, the online retail giant’s Echo, Kindle, and other devices have not generated the expected revenue. While Amazon boasts hundreds of millions of users for its devices, the Echo speakers are mainly utilized for basic functionalities like setting alarms rather than for shopping on the platform.
A former high-ranking Amazon employee expressed concern, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these challenges, Amazon CEO Andy Jassy is reportedly seeking solutions and is set to introduce a paid tier for its voice assistant. However, some engineers involved in this project have raised doubts about its potential impact.
An Amazon spokesperson emphasized the company’s commitment to creating value through its services, not just from device sales. They noted that the Devices & Services division has successfully established several profitable ventures and is positioned to continue this trend.
Additionally, Amazon’s newly developed AI-powered version of Alexa, showcased in September, is reportedly far from completion. Former employees stated the company lacks sufficient data and the necessary chips to support the large language model powering the latest iteration of the assistant. Instead, Amazon has shifted its focus towards enhancing generative AI capabilities for its cloud services, Amazon Web Services.
In response to the concerns raised by former employees, Amazon clarified that they are misinformed regarding its AI initiatives, asserting that the Amazon Artificial General Intelligence team has access to in-house Trainium chips and Nvidia GPUs. The company reiterated its commitment to its vision of developing the world’s best personal assistant.