Amazon’s initiative to profit from its Alexa-enabled devices has reportedly fallen short, resulting in significant financial losses for the company. According to a report by the Wall Street Journal, internal documents and unnamed sources revealed that Amazon lost over $25 billion from its Echo, Kindle, and other devices between 2017 and 2021. Despite boasting hundreds of millions of customers for its devices, it appears that Alexa-enabled Echo speakers are predominantly used for functions such as setting alarms and accessing free apps rather than making purchases on Amazon.
A former senior Amazon employee expressed concern about the company’s staffing decisions, suggesting they had hired 10,000 people only to create a “smart timer.” In response to the setbacks, Amazon CEO Andy Jassy is reportedly seeking solutions, including the introduction of a paid version of its voice assistant. However, insiders indicate that some engineers are skeptical about the potential effectiveness of this paid offering.
An Amazon representative emphasized the company’s commitment to creating value through its services, stating, “Our Devices & Services organization has established numerous profitable businesses for Amazon and is well-positioned to continue doing so going forward.”
In addition, Amazon’s new AI-driven Alexa, which was showcased in September, is said to be far from completion, according to former employees. The company reportedly lacks sufficient data and necessary chips to power the advanced language model for the upgraded assistant. Moreover, Amazon has shifted its focus from the AI-enhanced Alexa to prioritize generative AI development for its cloud computing division, Amazon Web Services.
In response to these claims, Amazon has stated that the information provided by former employees is inaccurate and that the Amazon Artificial General Intelligence team has access to the requisite in-house Trainium chips and Nvidia GPUs. The company’s ongoing plan remains to develop “the world’s best personal assistant.”