Amazon’s strategy to generate revenue from its Alexa-enabled devices has not yielded the expected results and has reportedly resulted in significant losses for the company. According to internal documents and sources familiar with the situation, Amazon incurred losses exceeding $25 billion from its Echo, Kindle, and other devices between 2017 and 2021. While the company boasts a vast customer base for its products, it appears that users primarily utilize the Alexa-enabled Echo speakers for setting alarms and other free applications, rather than for shopping on Amazon.
Concerns have arisen among former employees, with one noting the paradox of hiring thousands of workers only to create a basic smart timer instead of leveraging the potential of the devices. In response to these challenges, Amazon CEO Andy Jassy is reportedly in search of solutions, including the introduction of a paid version of the voice assistant. However, some engineers involved in this initiative express doubts about its success.
An Amazon representative stated that the company is concentrated on the value generated through service usage, beyond merely device sales. The Devices & Services division has successfully built various profitable businesses and aims to maintain this momentum.
Additionally, Amazon’s new artificial intelligence-enhanced Alexa, showcased in September, is reportedly not yet ready for deployment. Former employees claim that the company lacks sufficient data and access to the necessary chips required for the large language model driving this advanced version. Furthermore, there are indications that the AI-enhanced Alexa has been deprioritized in favor of developing generative AI for Amazon Web Services.
In response, Amazon has defended its position, asserting that former employees are misinformed about the company’s Alexa AI initiatives. The company claims that its Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs, with the goal of creating the world’s best personal assistant remaining a priority.