Amazon’s strategy to profit from its Alexa-enabled devices has not yielded positive results, with the company reportedly losing billions in the process. According to internal documents and sources familiar with the situation, the retail giant lost over $25 billion from its Echo, Kindle, and other devices between 2017 and 2021. Despite having hundreds of millions of customers using these devices, the Echo speakers are primarily utilized for basic functions like setting alarms rather than for shopping on Amazon.
A former high-ranking employee expressed concern, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In light of these losses, CEO Andy Jassy is seeking solutions, including the potential launch of a paid version of the voice assistant. However, some engineers involved with this project have voiced doubts about its effectiveness.
An Amazon spokesperson emphasized the company’s commitment to the value created through its services, asserting that the Devices & Services division has established many profitable ventures and is poised for future success.
Additionally, reports indicate that Amazon’s new AI-enhanced Alexa, which was showcased last September, is still far from completion. Former employees claim the company lacks sufficient data and access to necessary chips for running the large language model (LLM) that would drive the advancements for its virtual assistant. It has also been suggested that Amazon has shifted its focus towards developing generative AI for its cloud division, Amazon Web Services.
In response, Amazon has contested these claims, arguing that its former employees are misinformed about its Alexa AI efforts. The company states that its Artificial General Intelligence team has access to both its in-house Trainium chips and Nvidia GPUs, reaffirming its goal to create the best personal assistant available.