Amazon’s initiative to generate revenue from its Alexa-enabled devices has reportedly failed, resulting in significant financial losses for the company. Internal documents and sources familiar with the situation indicate that the online retail giant lost over $25 billion between 2017 and 2021 due to its Echo, Kindle, and various other devices.
Despite having hundreds of millions of customers, most users primarily utilize the Alexa-enabled Echo speakers for basic tasks like setting alarms and accessing free applications, rather than shopping on Amazon. A former senior employee expressed concerns about the company’s workforce, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to these issues, Amazon CEO Andy Jassy is seeking solutions, and the company is reportedly working on introducing a paid subscription for its voice assistant. However, some engineers involved in developing the paid version of Alexa have expressed doubts about its potential impact.
An Amazon spokesperson addressed these concerns, emphasizing the company’s focus on creating value for customers using their services, not just through device sales. They highlighted that the Devices & Services organization has successfully established several profitable ventures for Amazon and is well-positioned for future growth.
Additionally, Amazon’s next generation of AI-enhanced Alexa, which was showcased in September, is reportedly not yet fully prepared. Former employees noted that the company lacks sufficient data and necessary chips to run the large language model driving this new version. It has also been suggested that Amazon has shifted its priorities away from developing AI for Alexa, opting instead to concentrate on generative AI for its cloud computing division, Amazon Web Services.
Amazon contested the claims from former employees, asserting that they are out of touch with the company’s current AI initiatives. The company insists that its Artificial General Intelligence team does have access to essential in-house chips and Nvidia GPUs and that its overarching goal remains to create the best personal assistant available.