Amazon’s strategy to generate revenue from its Alexa-enabled devices has reportedly fallen short, resulting in significant financial losses for the company. Between 2017 and 2021, Amazon is said to have lost over $25 billion from its Echo, Kindle, and other devices, according to internal documents and sources familiar with the situation as reported by the Wall Street Journal. Although Amazon has attracted hundreds of millions of customers for its devices, it appears that Alexa-enabled Echo speakers are predominantly used for non-commercial purposes, such as setting alarms, rather than for shopping.
A former senior Amazon employee expressed concern about the company’s investment in the technology, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In light of these challenges, Amazon CEO Andy Jassy is reportedly seeking solutions and plans to introduce a paid version of its voice assistant. However, according to the Wall Street Journal, some engineers working on this new version are skeptical about its potential effectiveness.
An Amazon spokesperson emphasized that the company is focused on the value provided to customers using its services, rather than solely on device sales. They claimed that the Devices & Services division has established several profitable business ventures and is well positioned for future success.
Additionally, Amazon’s newly unveiled artificial intelligence-powered Alexa, showcased in September, is reportedly still far from completion, as former employees have indicated the company lacks adequate data and access to necessary hardware for the advanced language model driving the new assistant. Reports suggest that Amazon has shifted its priorities towards developing generative AI capabilities for its cloud computing division, Amazon Web Services.
In response to these concerns, Amazon stated that its former employees are misinformed regarding its capabilities. The company asserted that the Amazon Artificial General Intelligence team has access to both its Trainium chips and Nvidia GPUs, and remains committed to building the world’s leading personal assistant.