Amazon’s efforts to generate revenue from its Alexa-enabled devices have reportedly resulted in significant financial losses, totaling over $25 billion from 2017 to 2021, according to internal documents and sources familiar with the situation, as reported by the Wall Street Journal. Despite having hundreds of millions of customers using devices like the Echo and Kindle, these products are predominantly utilized for simple tasks such as setting alarms rather than for shopping on Amazon.
A former senior employee expressed concern about the direction of Amazon’s investments, commenting, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In light of these losses, CEO Andy Jassy is seeking solutions, including the introduction of a paid tier for Alexa. However, engineers involved in the development of this version are reportedly skeptical about its potential success.
An Amazon spokesperson stated, “We focus on the value we create when customers use our services, not just when they buy our devices,” emphasizing that the Devices & Services organization has established several profitable ventures and is prepared to continue this trajectory.
Additionally, concerns have been raised regarding the readiness of Amazon’s new AI-powered Alexa, which was showcased in September. Former employees indicated that the company lacks the necessary data and chip access to support the new large language model. Furthermore, Amazon has shifted its priority to developing generative AI solutions for its Amazon Web Services division.
Amazon countered these claims, asserting that its former employees are misinformed about its AI initiatives. The company stated that its Artificial General Intelligence team has sufficient access to in-house chips and Nvidia GPUs, reaffirming its commitment to creating the best personal assistant in the world.