Amazon’s efforts to monetize its Alexa-enabled devices appear to have backfired, leading to losses amounting to billions. According to internal documents and unnamed sources, the company incurred over $25 billion in losses from its Echo, Kindle, and other devices between 2017 and 2021.
Despite having hundreds of millions of users for its devices, the Alexa-enabled Echo speakers are primarily utilized for basic functions such as setting alarms and using free apps rather than shopping on Amazon, as reported by the Wall Street Journal.
One former senior employee expressed concern, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response, Amazon CEO Andy Jassy is exploring solutions, including the launch of a paid version of the voice assistant. However, some engineers working on this paid version are skeptical about its potential impact.
An Amazon spokesperson commented, “We’re focused on the value we create when customers use our services, not just when they buy our devices,” adding that the Devices & Services organization has established profitable businesses that are likely to continue thriving.
Meanwhile, Amazon’s newly developed AI-powered Alexa, showcased in September, is reportedly far from completion. Former employees claim the company lacks sufficient data and access to the necessary chips to support the large language model that drives the new assistant. Additionally, reports suggest that Amazon has shifted its focus towards developing generative AI for its cloud services division, Amazon Web Services.
In rebuttal, Amazon stated that the claims made by former employees regarding its Alexa AI initiatives are inaccurate. The company emphasized that its Amazon Artificial General Intelligence team has access to in-house Trainium chips and Nvidia GPUs, reaffirming its commitment to developing “the world’s best personal assistant.”