Amazon’s efforts to monetize its Alexa-enabled devices have reportedly fallen short, resulting in the loss of billions for the company. According to internal documents and insights from unnamed sources, the online retail giant experienced a loss exceeding $25 billion from its Echo, Kindle, and other devices between 2017 and 2021. Despite Amazon having hundreds of millions of customers using these devices, the Echo speakers are primarily utilized for setting alarms and accessing free applications rather than facilitating shopping on Amazon.
A former senior Amazon employee commented on the situation, expressing concern about the company’s hiring practices and the efficacy of their devices, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to the financial challenges, Amazon’s CEO Andy Jassy is searching for solutions, including the introduction of a paid version of Alexa. However, sources indicated that some engineers involved in the development of this paid service have doubts about its potential impact.
An Amazon representative emphasized the company’s focus on creating value through its services, not solely through device sales. The spokesperson noted that the Devices & Services division has successfully established profitable ventures for Amazon and is well-positioned for future success.
Additionally, concerns have been raised regarding the readiness of Amazon’s new AI-powered Alexa, which was showcased in September. Former employees revealed that the company lacks sufficient data and the necessary chips to support the large language model intended for this upgraded version of the virtual assistant. Reports suggest that Amazon has shifted its priorities to concentrate on generative AI for its cloud computing division, Amazon Web Services.
In response to criticism, Amazon contended that claims from former employees about its AI initiatives are inaccurate, asserting that its Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs. The company maintains its commitment to developing what it describes as the “world’s best personal assistant.”