Amazon’s strategy to profit from its Alexa-enabled devices has reportedly been unsuccessful, leading to significant financial losses for the company. According to internal documents and sources familiar with the situation, the online retail giant has lost over $25 billion from its Echo, Kindle, and other devices between 2017 and 2021. Despite having hundreds of millions of customers, Amazon’s Echo speakers are primarily used for basic functions like setting alarms rather than shopping.
A former senior Amazon employee expressed concerns, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these challenges, CEO Andy Jassy is reportedly exploring the introduction of a paid version of Alexa. However, some engineers on the project remain skeptical about its potential effectiveness.
An Amazon spokesperson emphasized that the company is focusing on the value created when customers use its services in addition to device sales. The spokesperson highlighted that the Devices & Services organization has established several profitable businesses and is positioned for future success.
In addition, the latest version of Amazon’s AI-driven Alexa, demonstrated in September, is reportedly behind schedule. Former employees have stated that the company lacks sufficient data and access to necessary chips to support the large language model for the new assistant. Furthermore, Amazon is said to have shifted its priorities to concentrate on generative AI developments within its cloud computing sector, Amazon Web Services.
Amazon has refuted claims from former employees regarding its Alexa AI initiatives, insisting that its Artificial General Intelligence team has access to both Trainium chips and Nvidia graphics processing units. The company reaffirmed its commitment to building the “world’s best personal assistant.”