Amazon’s strategy to generate revenue through its Alexa-enabled devices has reportedly fallen short, resulting in substantial financial losses for the company. Internal documents and sources reveal that between 2017 and 2021, Amazon lost over $25 billion on products like the Echo and Kindle.
While the tech giant boasts hundreds of millions of device users, it appears that the Alexa-enabled Echo speakers are primarily utilized for functions such as setting alarms, rather than for making purchases on Amazon.
Concerns were raised by a former senior Amazon employee who remarked on the workforce expansion, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
Amazon’s CEO, Andy Jassy, is now actively seeking solutions and is reportedly set to introduce a paid tier for its voice assistant. However, some engineers reportedly believe this paid version of Alexa may not significantly alter the current situation.
An Amazon spokesperson stated, “We are focused on the value we create when customers use our services, not just when they buy our devices.” They emphasized that the Devices & Services organization has established various profitable ventures for Amazon and is on track to continue this trend.
In addition, Amazon’s new AI-powered version of Alexa, showcased in September, is said to be far from completion. Former employees claim the company lacks sufficient data and access to the necessary chips to support the large language model needed for this new iteration of its virtual assistant. Reports also indicate that Amazon has shifted its priorities to enhance generative AI capabilities for its cloud computing division, Amazon Web Services.
In response, Amazon stated that the claims by former employees are incorrect and that the Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs, reaffirming the company’s commitment to developing “the world’s best personal assistant.”