Amazon’s attempts to profit from its Alexa-enabled devices have reportedly led to significant financial losses, with the company losing over $25 billion from 2017 to 2021, according to the Wall Street Journal. Internal documents and sources familiar with the matter indicate that while Amazon has a vast customer base for its Echo, Kindle, and other devices, the primary use of Alexa-enabled Echo speakers tends to be for setting alarms and utilizing free applications, rather than for making purchases on Amazon.
A former senior Amazon employee expressed concern about the company’s investment in the technology, questioning the effectiveness of adding thousands of employees without achieving desired results.
In response to these challenges, Amazon CEO Andy Jassy is exploring solutions, which may include launching a paid version of Alexa. However, some engineers within the company reportedly worry that this initiative may not yield the desired results.
An Amazon representative emphasized that the focus is on the value created for customers using their services, not just the sales of devices. They noted that the Devices & Services division has established several profitable ventures and is positioned to continue achieving success.
In addition, Amazon’s recently announced AI-powered version of Alexa, demonstrated in September, is reportedly facing development challenges. Former employees have stated that the company lacks the required data and access to the chips necessary for running the new large language model. Furthermore, Amazon seems to be shifting its priorities to developing generative AI for its cloud computing branch, Amazon Web Services.
Amazon has refuted claims from former employees, stating that they are misinformed. The company asserts that its Artificial General Intelligence team has adequate access to both its proprietary Trainium chips and Nvidia GPUs, maintaining that their objective remains to create the best personal assistant available.