Amazon’s strategy to generate revenue through its Alexa-enabled devices has reportedly not succeeded, leading to significant financial losses for the company. According to internal documents and sources familiar with the situation, Amazon lost over $25 billion between 2017 and 2021 on devices such as the Echo and Kindle. While the company boasts hundreds of millions of customers using these devices, data suggests that most users rely on them for basic functions like setting alarms rather than for shopping on Amazon.
A former senior Amazon employee expressed concerns regarding the company’s expenditure, remarking, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to these challenges, Amazon’s CEO Andy Jassy is reportedly exploring solutions, including launching a paid version of its voice assistant. However, some engineers involved in the project are skeptical about its potential to improve the situation.
An Amazon spokesperson emphasized the company’s focus on creating value for customers beyond device sales, noting that the Devices & Services division has generated several profitable initiatives and is positioned to maintain this success.
In addition, Amazon’s recently unveiled AI-powered Alexa, showcased in September, is reportedly not yet fully operational, as per former employees. Challenges include insufficient data and limited access to the necessary technology for implementing a large language model. Furthermore, the company is said to have shifted its focus towards developing generative AI for its cloud computing arm, Amazon Web Services, rather than on the AI-enhanced Alexa.
Amazon contends that criticisms from former employees are unfounded, affirming that its Artificial General Intelligence team has access to the required in-house chips and Nvidia GPUs. The company reiterated its commitment to creating the world’s leading personal assistant with Alexa.