Amazon’s initiative to generate revenue from its Alexa-enabled devices has reportedly been unsuccessful, leading to significant financial losses for the company. According to internal documents and anonymous sources cited by the Wall Street Journal, Amazon incurred losses exceeding $25 billion from its Echo, Kindle, and other devices between 2017 and 2021. Although the company boasts millions of customers using these devices, data suggests that Alexa-enabled Echo speakers are primarily utilized for tasks like setting alarms and accessing free apps rather than facilitating purchases on Amazon.
A former senior employee reflected on the situation, 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 the introduction of a paid version of the voice assistant. However, some engineers involved in this initiative express skepticism regarding its potential to drive significant changes.
An Amazon spokesperson responded by emphasizing the company’s focus on the value created when customers utilize its services, beyond just device sales. They stated that the Devices & Services organization has successfully established several profitable ventures and is poised to continue doing so.
Additionally, reports highlight that Amazon’s new AI-powered Alexa, showcased in September, is not yet fully developed. Previous employees indicated that the company lacks sufficient data and the necessary chips to operate the large language model driving the new assistant. Furthermore, Amazon has reportedly shifted its priorities toward enhancing generative AI capabilities for its cloud computing service, Amazon Web Services.
In response to these claims, Amazon asserted that its former employees are misinformed regarding the status of its Alexa AI projects. The company indicated that its Artificial General Intelligence team has access to both its in-house Trainium chips and Nvidia graphics processing units (GPUs). Amazon reaffirmed its commitment to its vision for Alexa, stating, “to build the world’s best personal assistant.”