Amazon’s efforts to generate revenue from its Alexa-enabled devices have reportedly not been successful, resulting in significant losses for the company. Between 2017 and 2021, Amazon is said to have lost over $25 billion from its Echo, Kindle, and other devices, as reported by the Wall Street Journal, which referenced internal documents and sources familiar with the matter. Despite having hundreds of millions of customers for its devices, it appears that the Alexa-enabled Echo speakers are primarily used for basic functions like setting alarms and utilizing free apps, rather than for purchasing goods on Amazon.
A former senior Amazon employee expressed concerns about the company hiring thousands of staff only to develop what they termed a “smart timer.” In response to these challenges, Amazon CEO Andy Jassy is searching for solutions and is reportedly planning to introduce a paid version of its voice assistant. However, there are reservations among some engineers regarding the effectiveness of this strategy.
An Amazon spokesperson noted, “We are focused on the value we create when customers use our services, not just when they buy our devices,” emphasizing that the Devices & Services organization has been able to create profitable business avenues and is well-positioned for future success.
Meanwhile, Amazon’s new AI-powered version of Alexa, which was showcased in September, is reportedly far from completion, according to former employees. The company allegedly lacks sufficient data and access to the necessary chips to operate the large language model that powers this updated virtual assistant. It has also been reported that Amazon has shifted its focus from AI-powered Alexa to developing generative AI for its cloud services division, Amazon Web Services.
In response to these claims, Amazon has asserted that the former employees are misinformed about its AI initiatives, stating that the Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia graphics processing units (GPUs). The company maintains that its objective for Alexa remains unchanged — to create the world’s best personal assistant.