Amazon’s endeavor to profit from its Alexa-enabled devices has reportedly backfired, resulting in significant financial losses for the company. Between 2017 and 2021, internal documents and sources familiar with the situation indicated that Amazon accrued losses exceeding $25 billion from its Echo, Kindle, and other devices.
Although Amazon boasts a vast user base for its devices, the Echo speakers, which feature the Alexa voice assistant, are primarily used for basic tasks such as setting alarms rather than for shopping on Amazon. A former senior Amazon employee expressed concerns about the workforce investment in developing what has essentially become a smart timer.
In response to these challenges, Amazon CEO Andy Jassy is seeking solutions, including the introduction of a paid subscription for the Alexa voice assistant. However, some engineers working on this initiative are skeptical about its potential success.
An Amazon spokesperson emphasized the company’s commitment to creating value for customers beyond just device sales, highlighting ongoing profitable ventures within its Devices & Services organization.
On another front, Amazon recently showcased an artificial intelligence-enhanced version of Alexa, but former employees claim it is far from completion. They noted that the company lacks sufficient data and access to essential hardware for the large language model (LLM) that will power this updated assistant. Furthermore, Amazon has reportedly shifted its focus toward developing generative AI for its cloud service division, Amazon Web Services.
In response to these criticisms, Amazon contended that former employees’ assessments are erroneous. The company stated that its Artificial General Intelligence team has access to both its proprietary Trainium chips and Nvidia GPUs, affirming its intent to continue working on building the world’s premier personal assistant.