Amazon’s ambitions to profit from its Alexa-enabled devices appear to be falling short, leading to significant financial losses. According to reports, the online retail giant incurred over $25 billion in losses from its Echo, Kindle, and other devices between 2017 and 2021, as detailed by the Wall Street Journal, which referenced internal documents and sources familiar with the situation. Despite boasting hundreds of millions of customers for its devices, the Alexa-enabled Echo speakers are primarily utilized for non-purchase activities like setting alarms, rather than facilitating shopping.
A former senior employee expressed concern over the direction of Amazon’s investments, highlighting a disconnect between hiring practices and product functionality, 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 exploring solutions, including a paid version of the Alexa voice assistant. However, some engineers involved in this development have expressed doubts regarding its potential effectiveness.
An Amazon spokesperson emphasized the company’s focus on creating value through customer interactions, stating, “Our Devices & Services organization has established numerous profitable businesses for Amazon and is well-positioned to continue doing so going forward.”
Additionally, the new AI-powered version of Alexa, which was demoed in September, is said to be far from ready, with former employees citing a lack of adequate data and necessary technology, such as the chips required for the large language model behind the new assistant. Reports suggest that Amazon has shifted its priorities toward developing generative AI for its cloud computing unit, Amazon Web Services.
In response to the criticism from former employees, Amazon maintains that these claims are unfounded, asserting that the Amazon Artificial General Intelligence team has access to both its Trainium chips and Nvidia GPUs. The company’s intention to build “the world’s best personal assistant” for Alexa remains unchanged.