Amazon’s efforts to monetize its Alexa-enabled devices have reportedly not yielded positive results, resulting in significant financial losses for the company. According to internal documents and unnamed sources cited by the Wall Street Journal, Amazon incurred over $25 billion in losses from its Echo, Kindle, and other devices between 2017 and 2021. Despite having hundreds of millions of customers utilizing these devices, the Echo speakers are primarily used for tasks such as setting alarms and accessing free apps rather than making purchases.
Concerns about the company’s strategy were expressed by a former senior employee who noted, “We worried we’ve hired 10,000 people, and we’ve built a smart timer.” As Amazon CEO Andy Jassy seeks solutions, the company is reportedly planning to introduce a paid version of its voice assistant. However, some engineers involved in the project have expressed skepticism about its potential impact.
An Amazon spokesperson emphasized that the company is dedicated to creating value for customers using its services, rather than solely focusing on device sales. They stated that the Devices & Services organization has successfully established several profitable ventures for Amazon and aims to continue this trend.
In addition, Amazon’s new AI-driven version of Alexa, which was demonstrated in September, is reportedly far from ready, according to former employees. The company lacks sufficient data and access to the necessary chips for operating the large language model that will support the revamped assistant. Reports suggest that Amazon has chosen to prioritize generative AI development for its cloud computing division, Amazon Web Services, over the AI-powered Alexa.
In response to these claims, Amazon asserted that the former employees misunderstand the company’s current AI initiatives, declaring that the Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs. The company maintains that its objective for Alexa is to create the world’s leading personal assistant.