Amazon’s strategy to generate revenue through its Alexa-enabled devices has reportedly resulted in significant financial losses, totaling over $25 billion from 2017 to 2021. According to internal documents and sources familiar with the matter, the online retail giant’s devices, including the Echo and Kindle, have not performed as expected. Despite having hundreds of millions of users, many utilize the Echo speakers primarily for setting alarms and other free applications rather than for shopping.
A former senior employee expressed concerns about the company’s focus, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these challenges, Amazon CEO Andy Jassy is seeking solutions, including the introduction of a paid version of its voice assistant, Alexa. However, some engineers reportedly doubt that this approach will resolve the issues.
An Amazon spokesperson emphasized the company’s commitment to creating value for customers beyond just device sales, highlighting the profitability of its Devices & Services organization. Meanwhile, the release of a new AI-powered version of Alexa, showcased in September, may be facing delays. Former employees claim the project lacks sufficient data and the necessary chips to operate the new large language model.
Amazon has countered these claims, asserting that its technology teams have access to adequate resources, including in-house chips and Nvidia GPUs, and that their goal remains to develop the best personal assistant in the world.