Amazon’s strategy to generate revenue from its Alexa-enabled devices has not been successful and has resulted in significant financial losses for the company. According to reports from the Wall Street Journal, Amazon lost over $25 billion from its Echo, Kindle, and other devices between 2017 and 2021, based on internal documents and insights from unnamed sources. Although the company has amassed hundreds of millions of users for its devices, it appears that customers primarily utilize the Alexa-enabled Echo speakers for basic functions like setting alarms, rather than making purchases on Amazon.
A former senior Amazon employee expressed concerns about the direction of the company’s investments, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to the ongoing challenges, Amazon CEO Andy Jassy is exploring solutions, including the introduction of a paid version of its voice assistant. However, some engineers involved in the project have raised doubts about its potential effectiveness.
An Amazon spokesperson emphasized the company’s focus on creating value through its services rather than solely through device sales, noting that the Devices & Services organization has successfully established several profitable businesses and is positioned for continued growth.
In addition, the new AI-powered version of Alexa, which was showcased in September, is reportedly far from completed, as former employees indicate that the company lacks sufficient data and access to the necessary hardware for this advanced technology. Amazon is also believed to have shifted its priorities to focus more on generative AI for its cloud computing division, Amazon Web Services.
In response, Amazon has stated that the former employees’ claims are incorrect and emphasizes that its Amazon Artificial General Intelligence team has access to both its proprietary Trainium chips and Nvidia GPUs. The company remains committed to its goal of developing the best personal assistant in the market.