Amazon’s initiative to generate revenue from its Alexa-enabled devices has reportedly fallen short, resulting in a loss of billions for the company. According to internal documents and unnamed sources referenced by the Wall Street Journal, Amazon incurred over $25 billion in losses from its Echo, Kindle, and other devices between 2017 and 2021. Despite having hundreds of millions of users, the Echo speakers are primarily utilized for tasks like setting alarms and accessing free applications, rather than for making purchases on Amazon.
A former senior Amazon employee expressed concerns, 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 seeking solutions, including the introduction of a paid version of the voice assistant. However, there are reports that some engineers working on this paid version are skeptical about its potential impact.
An Amazon spokesperson commented, “We are focused on the value we create when customers use our services, not just when they buy our devices.” The spokesperson noted that the Devices & Services organization has established numerous profitable ventures for Amazon and is well-positioned for future success.
Additionally, Amazon’s upcoming AI-powered Alexa, showcased in September, is reportedly not ready for launch, according to former employees. The company is said to lack sufficient data and access to the necessary chips to support the new version’s large language model. Furthermore, Amazon has reportedly shifted its focus towards generative AI for its cloud computing division, Amazon Web Services.
In defense of its strategy, Amazon contended that former employees are misinformed regarding its current AI efforts, asserting that the Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs. The company’s commitment to developing “the world’s best personal assistant” for Alexa remains unchanged.