Amazon’s attempts to generate revenue from its Alexa-enabled devices have reportedly fallen short, resulting in substantial losses for the company. From 2017 to 2021, Amazon is said to have lost over $25 billion on devices like the Echo and Kindle, according to internal documents and sources quoted by the Wall Street Journal. Despite having hundreds of millions of users for these devices, the Echo speakers are primarily used for basic functions like setting alarms rather than for shopping on Amazon.
A former senior employee expressed concerns about the company’s investment, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to these challenges, Amazon CEO Andy Jassy is exploring solutions, which reportedly include launching a paid version of Alexa. However, some engineers working on this initiative have expressed skepticism about its potential impact.
An Amazon spokesperson addressed these concerns, stating, “We focus on the value we create when customers use our services, not just when they buy our devices.” The spokesperson added that the Devices & Services organization has created several profitable ventures for Amazon and is positioned for future success.
Additionally, reports indicate that Amazon’s new AI-enhanced version of Alexa, which was showcased in September, may not be ready for launch. Former employees noted that the company lacks sufficient data and access to the necessary chips to support the technology behind the updated assistant. It has been reported that Amazon has shifted its focus toward developing generative AI for its cloud services division, Amazon Web Services.
In response to these allegations, Amazon contested the claims of former employees, stating that they are misinformed about the current state of its AI initiatives. The company asserted that its Artificial General Intelligence team has access to both proprietary Trainium chips and Nvidia GPUs, emphasizing its ongoing commitment to enhancing Alexa into the world’s leading personal assistant.