Amazon’s efforts to profit from its Alexa-enabled devices have reportedly resulted in significant financial losses, with the company losing over $25 billion from its Echo, Kindle, and other devices between 2017 and 2021, according to the Wall Street Journal. Internal documents and anonymous sources revealed that while Amazon boasts hundreds of millions of customers for its devices, the Alexa-equipped Echo speakers are primarily used for functions such as setting alarms rather than for shopping.
A former senior employee remarked on the issue, expressing concern that despite hiring 10,000 people, the outcome has been a “smart timer” rather than a profitable assistant. In response to these challenges, Amazon CEO Andy Jassy is reportedly exploring solutions, including a potential paid version of the voice assistant. However, engineers involved in the project have expressed skepticism about its potential effectiveness.
An Amazon spokesperson emphasized the company’s focus on the overall value provided to customers rather than just device sales. They noted that the Devices & Services organization has established successful businesses and is positioned to continue achieving profitability.
Further complicating matters, reports indicate that Amazon’s upcoming AI-driven version of Alexa is still far from ready. Former employees have pointed out that the company lacks sufficient data and necessary hardware to develop the large language model for the new assistant. Additionally, it appears that Amazon has shifted its focus to enhancing generative AI capabilities for its cloud service, Amazon Web Services.
In response to these claims, Amazon has stated that its former employees are misinformed regarding the progress of its Alexa AI initiatives, asserting that the team has access to the required resources, including in-house Trainium chips and Nvidia GPUs. The company’s objective remains clear: to build the world’s best personal assistant.