Amazon’s efforts to generate revenue through its Alexa-enabled devices have not yielded the expected results, resulting in significant financial losses for the company. According to the Wall Street Journal, internal documents and sources reveal that Amazon lost more than $25 billion from its Echo, Kindle, and other devices between 2017 and 2021. Despite having hundreds of millions of customers, the majority use Alexa-enabled Echo speakers primarily for tasks like setting alarms rather than for shopping on Amazon.
A former senior employee expressed concerns about the lack of 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 exploring potential solutions, including the introduction of a paid tier for the voice assistant. However, engineers involved in the development of this paid version have expressed skepticism about its potential effectiveness.
An Amazon spokesperson emphasized the company’s commitment to creating value through its services beyond just the sale of devices, noting that the Devices & Services division has established numerous profitable business avenues and is positioned for future success.
Additionally, the development of Amazon’s new AI-powered Alexa, showcased in September, has reportedly faced delays. Former employees stated that the company lacks sufficient data and the necessary chips to effectively run the large language model that will enhance the assistant’s capabilities. Moreover, Amazon has shifted its focus from Alexa to prioritize generative AI advancements within its cloud computing segment, Amazon Web Services.
In response to these claims, Amazon contested the accuracy of the former employees’ statements, asserting that its Artificial General Intelligence team has access to essential technology, including in-house Trainium chips and Nvidia GPUs. The company’s objective for Alexa remains clear: to develop the world’s premier personal assistant.