Amazon’s efforts to generate revenue through its Alexa-enabled devices have reportedly resulted in significant financial losses, with estimates indicating over $25 billion lost from the company’s Echo, Kindle, and other devices between 2017 and 2021, according to the Wall Street Journal. Despite boasting hundreds of millions of customers, Amazon’s Echo speakers are primarily used for basic functions such as setting alarms and utilizing free applications, rather than making purchases on its platform.
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, CEO Andy Jassy is reportedly seeking solutions, including the introduction of a paid subscription tier for Alexa. However, some engineers involved in the development of this paid version are skeptical about its potential impact.
An Amazon spokesperson emphasized the company’s focus on the overall value delivered to customers beyond just device sales, mentioning that its Devices & Services division has successfully established profitable ventures.
In addition, the latest version of Alexa, which incorporates artificial intelligence capabilities showcased in September, is reportedly facing delays. Former employees noted that the company lacks sufficient data and access to necessary technology, such as chips, to support the large language model that underpins the new assistant. Meanwhile, Amazon has shifted its focus toward enhancing generative AI for its cloud computing segment, Amazon Web Services.
In response to these claims, Amazon refuted the assertions of former employees, stating that its Artificial General Intelligence team has access to essential technology, including both proprietary Trainium chips and Nvidia graphics processing units (GPUs), and reaffirmed its commitment to developing the best personal assistant in the market.