Amazon’s initiative to generate revenue through its Alexa-enabled devices has reportedly backfired, resulting in significant financial losses for the company. According to a report from the Wall Street Journal, internal documents and anonymous sources indicate that Amazon lost over $25 billion on devices such as the Echo and Kindle from 2017 to 2021. Despite having hundreds of millions of customers, the Alexa-enabled Echo speakers are primarily utilized for basic functions like setting alarms rather than for shopping on Amazon.
A former senior employee expressed concern about the company’s workforce, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In light of these challenges, Amazon CEO Andy Jassy is reportedly seeking solutions, including the introduction of a paid version of the Alexa voice assistant. However, some engineers are doubtful about the potential impact of this paid version.
An Amazon spokesperson highlighted the company’s broader focus on creating value for customers through its services, asserting that the Devices & Services division has established several profitable ventures and is poised for future success.
In the meantime, Amazon’s newly announced AI-powered Alexa, showcased in September, is reportedly not fully developed. Former employees noted that the company lacks sufficient data and access to the necessary chips to operate the advanced language model for this new version. Moreover, Amazon is reportedly prioritizing generative AI development for its cloud computing arm, Amazon Web Services, over the new Alexa.
Amazon has refuted claims from former employees, stating they are misinformed about its current AI initiatives. The company maintains that its Artificial General Intelligence team has adequate access to both proprietary chips and Nvidia GPUs, reaffirming its commitment to creating the best personal assistant.