Amazon’s strategy to generate revenue from its Alexa-enabled devices has reportedly been unsuccessful, leading to significant financial losses for the company. According to a report from the Wall Street Journal, the online retail giant lost over $25 billion from its Echo, Kindle, and other devices between 2017 and 2021, based on internal documents and insights from anonymous sources. Although Amazon has attracted hundreds of millions of customers to its devices, the Echo speakers have primarily been used for basic functions like setting alarms instead of promoting shopping on Amazon.
A former senior employee expressed concern, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these challenges, Amazon’s CEO Andy Jassy is searching for solutions and is rumored to be introducing a paid version of its voice assistant. However, some engineers involved in this project are skeptical about its potential effectiveness.
An Amazon spokesperson commented that the company is dedicated to creating value for customers beyond device sales. They emphasized that their Devices & Services division has already established several profitable ventures for Amazon and is well-equipped to sustain this growth.
Additionally, the new AI-enhanced Alexa, showcased in September, is reportedly not ready for launch, according to several former employees. They noted that the company lacks adequate data and the necessary chips to operate the large language model powering the new version of Alexa. Furthermore, Amazon is said to have shifted focus towards developing generative AI for its Cloud computing division, Amazon Web Services.
In defense of its capabilities, Amazon has rejected claims made by former employees, asserting that its Amazon Artificial General Intelligence team has the required access to both in-house Trainium chips and Nvidia GPUs. The company reiterated its commitment to developing the world’s leading personal assistant.