Amazon’s endeavors to monetize its Alexa-enabled devices have reportedly come at a significant financial cost, with the company allegedly losing billions. According to internal documents and sources cited by the Wall Street Journal, the online retail giant experienced losses exceeding $25 billion from its Echo, Kindle, and other devices between 2017 and 2021. Although Amazon has amassed hundreds of millions of customers for its products, many users primarily utilize the Alexa-enabled Echo speakers for basic functions like setting alarms, rather than for shopping purposes.
A former senior Amazon employee expressed concern about the situation, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response, Amazon’s CEO Andy Jassy is seeking solutions and is reportedly introducing a paid version of its voice assistant. However, some engineers involved in the development of this paid version are skeptical about its potential impact.
An Amazon spokesperson emphasized the company’s commitment to creating value through its services rather than solely relying on product sales. They noted that Amazon’s Devices & Services division has successfully established several profitable businesses and is poised to continue this trend.
In addition, reports indicate that Amazon’s new AI-enhanced Alexa, showcased in September, is still far from being fully developed. Former employees claim that the company lacks sufficient data and access to the necessary chips to support the large language model powering the updated version of its virtual assistant. Furthermore, Amazon may have shifted its focus away from AI-enhanced Alexa to prioritize generative AI development for its cloud services unit, Amazon Web Services.
In rebuttal, Amazon asserted that the critiques from former employees regarding its AI efforts are inaccurate. The company insists that the Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs, reaffirming its objective to create “the world’s best personal assistant.”