Amazon’s efforts to generate revenue through its Alexa-enabled devices have reportedly not been successful, resulting in substantial financial losses for the company. A recent report from the Wall Street Journal highlights that Amazon incurred losses exceeding $25 billion from its Echo, Kindle, and other devices between 2017 and 2021, according to internal documents and sources familiar with the situation. Despite boasting hundreds of millions of customers for its devices, findings suggest that users primarily engage with Alexa-enabled Echo speakers for simple tasks like setting alarms rather than making purchases on Amazon.
A former senior Amazon employee expressed concerns about the hiring of 10,000 staff to develop what they described as a “smart timer.” In response to the ongoing challenges, Amazon CEO Andy Jassy is reportedly seeking solutions, including the launch of a paid version of its voice assistant. However, some engineers involved in this development are skeptical about its potential impact.
An Amazon spokesperson emphasized the company’s focus on the overall value generated for customers through its services, rather than just device sales. They asserted that the Devices & Services division has established several profitable ventures and is well-positioned for future growth.
On another note, reports indicate that Amazon’s upcoming AI-powered Alexa, showcased in September, is not yet fully operational. Former employees have claimed the company lacks sufficient data and access to the necessary chips to support the new large language model (LLM) that will drive this version of the virtual assistant. Additionally, it seems Amazon has shifted its priorities away from AI-enhanced Alexa to concentrate on generative AI for its cloud services arm, Amazon Web Services.
In response to these criticisms, Amazon contends that its former employees are misinformed about its current Alexa AI initiatives and maintains that the Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs. The company’s commitment to developing “the world’s best personal assistant” for Alexa remains unchanged.