Amazon’s efforts to generate profits through its Alexa-enabled devices have reportedly been unsuccessful, resulting in substantial losses for the company. According to internal documents and sources familiar with the situation, Amazon lost over $25 billion from its Echo, Kindle, and other devices between 2017 and 2021. While the company boasts hundreds of millions of customers using these devices, the usage of its Alexa-enabled Echo speakers tends to be more focused on basic functions like setting alarms rather than shopping on Amazon.
A former senior Amazon employee expressed concerns about the company’s hiring practices, 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 voice assistant. However, some engineers working on this paid version express skepticism about its potential effectiveness.
An Amazon spokesperson emphasized that the company prioritizes the value provided to customers through its services rather than solely focusing on device sales. The spokesperson stated that the Devices & Services division has established a range of profitable businesses and is positioned for future success.
In addition, Amazon’s AI-enhanced version of Alexa, which was showcased in September, is reportedly not ready for launch, according to former employees. These employees highlighted a lack of sufficient data and access to necessary chips to support the new large language model for the virtual assistant. Furthermore, Amazon has allegedly shifted its focus toward developing generative AI for its cloud computing division, Amazon Web Services.
In response to these claims, Amazon argued that former employees are misinformed about its current AI initiatives and confirmed that the Amazon Artificial General Intelligence team has access to essential resources, including both in-house and Nvidia chips. The company remains committed to its goal of creating the world’s best personal assistant.