Amazon’s ambitions to profit from its Alexa-enabled devices have reportedly fallen short, resulting in significant financial losses for the company. According to internal documents and sources familiar with the situation, Amazon incurred over $25 billion in losses from its Echo, Kindle, and other devices between 2017 and 2021. Although hundreds of millions of customers own these devices, they primarily use them for setting alarms and accessing free applications rather than for shopping on Amazon.
Concerns have been raised by former employees about the effectiveness of these investments, with one stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response, Amazon CEO Andy Jassy is reportedly seeking solutions, including the introduction of a paid tier for its voice assistant. However, some engineers involved in developing this paid version of Alexa are skeptical about its potential impact.
An Amazon spokesperson emphasized the company’s focus on providing value through its services beyond simply selling devices. They highlighted that Amazon’s Devices & Services division has successfully established profitable ventures and is well-positioned for future success.
On another front, Amazon’s new AI-enhanced version of Alexa, showcased in September, is reportedly not nearing readiness, according to former employees. The company is said to lack sufficient data and access to the necessary chips to support the advanced language model driving the AI assistant. Moreover, Amazon has shifted its focus towards developing generative AI for its cloud computing branch, Amazon Web Services.
In response to the critiques from former employees, Amazon stated that their information is inaccurate and that the Amazon Artificial General Intelligence team has access to both its proprietary Trainium chips and Nvidia GPUs. The company reiterated its commitment to building “the world’s best personal assistant.”