Amazon’s efforts to monetize its Alexa-enabled devices have reportedly fallen short, resulting in substantial financial losses for the company. According to internal documents and sources familiar with the situation, Amazon lost over $25 billion on products such as the Echo and Kindle between 2017 and 2021. Despite having hundreds of millions of customers, data indicates that users primarily utilize the Echo speakers for simple tasks like setting alarms rather than making purchases through Amazon.
A former senior Amazon employee expressed concerns about the company’s hiring practices, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
Seeking solutions, Amazon CEO Andy Jassy is reportedly launching a subscription service for Alexa. However, some engineers involved in the project are skeptical about its potential effectiveness.
An Amazon spokesperson emphasized that the company is focused on delivering value through its services, rather than solely on device sales. They claimed that the Devices & Services division has successfully established several profitable ventures and is positioned for future growth.
In addition, the company’s new AI-enhanced version of Alexa, which was showcased in September, is reportedly not yet operational. Former employees have noted that Amazon lacks sufficient data and access to the necessary chips to support the large language model behind the updated assistant. Furthermore, it appears the company has shifted its attention toward generative AI developments for Amazon Web Services instead.
In response to these concerns, Amazon refuted claims from former employees, asserting that they are misinformed about the company’s AI developments. The Amazon Artificial General Intelligence team has the resources, including both proprietary chips and Nvidia GPUs, to pursue their vision of creating the best personal assistant in the market.