Amazon’s efforts to profit from its Alexa-enabled devices have reportedly not succeeded, resulting in significant financial losses for the company. According to internal documents and sources familiar with the situation, Amazon lost over $25 billion between 2017 and 2021 due to its Echo, Kindle, and other devices, as reported by the Wall Street Journal. While the company has amassed hundreds of millions of users for its devices, the Echo speakers are primarily utilized for tasks like setting alarms and using free apps, rather than driving sales on Amazon.
A former senior Amazon employee expressed concerns about the workforce and the development focus, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to these challenges, CEO Andy Jassy is seeking solutions, and the company is reportedly planning to introduce a paid version of its voice assistant. However, some engineers involved in developing this version have concerns about its potential impact.
An Amazon spokesperson emphasized the company’s dedication to creating value for customers beyond just device sales, stating that its Devices & Services organization has established multiple profitable ventures and is poised for future growth.
On another front, Amazon’s new AI-enhanced version of Alexa, demonstrated in September, is reportedly far from complete, according to former employees. The company lacks sufficient data and access to the necessary chips to power the large language model that is intended for this upgraded assistant. Furthermore, Amazon has shifted its focus towards generative AI development for its cloud division, Amazon Web Services.
In response to these criticisms, Amazon asserted that the former employees’ claims about its AI initiatives are inaccurate and that its Amazon Artificial General Intelligence team has the necessary resources, including access to proprietary Trainium chips and Nvidia GPUs, to meet its goal of creating the world’s best personal assistant.