Amazon’s strategy to generate revenue from its Alexa-enabled devices has not been successful, resulting in over $25 billion in losses between 2017 and 2021, according to a report by the Wall Street Journal. Internal documents and sources indicate that while Amazon has attracted hundreds of millions of users for devices like Echo and Kindle, most customers primarily use the Echo speakers for basic tasks such as setting alarms rather than for shopping.
A former senior Amazon employee expressed concern, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response, CEO Andy Jassy is reportedly exploring solutions, including launching a paid tier for Alexa. However, some engineers are skeptical about the potential impact of this initiative.
An Amazon spokesperson emphasized the company’s focus on the value provided through its services, not just device sales, and highlighted the profitability of its Devices & Services organization.
Meanwhile, Amazon’s new AI-powered version of Alexa, which was showcased in September, is reportedly far from ready, according to former employees. The company is said to lack sufficient data and access to the chips required to operate the large language model that powers the new assistant. Additionally, Amazon has shifted its priorities towards developing generative AI for its Amazon Web Services cloud division.
Amazon has countered these claims, asserting that its former employees are misinformed about its AI capabilities and asserting that the Amazon Artificial General Intelligence team has access to the necessary Trainium chips and Nvidia GPUs. The company maintains that its goal remains to create the best personal assistant in the world.