Amazon’s efforts to generate revenue from its Alexa-enabled devices have reportedly not succeeded, resulting in losses amounting to billions of dollars for the tech giant. According to internal documents and sources familiar with the situation, 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 using these devices, the data suggests that many users primarily utilize them for setting alarms and accessing free applications rather than shopping on Amazon.
A former senior Amazon employee expressed concerns over the company’s workforce and product focus, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to the challenges, Amazon CEO Andy Jassy is reportedly exploring solutions, including the introduction of a paid tier for its voice assistant. However, some engineers involved in developing this paid version have expressed skepticism about its potential effectiveness.
An Amazon spokesperson highlighted that the company is concentrating on creating value for customers engaged with its services, beyond just device sales. They noted that the Devices & Services division has successfully established profitable ventures for Amazon and is equipped to continue this trend.
On another front, Amazon’s new AI-powered Alexa, revealed in a September demonstration, is said to be far from ready, as reported by former employees. It appears that the company lacks sufficient data and access to the necessary chips for the large language model that underpins the new virtual assistant. Additionally, Amazon has reportedly shifted its focus towards advancing generative AI for its cloud computing branch, Amazon Web Services.
In defense of its progress, Amazon stated that its former employees are misinformed about its AI advancements and confirmed that the Amazon Artificial General Intelligence team has access to both its in-house Trainium chips and Nvidia GPUs. The company reiterated its commitment to develop “the world’s best personal assistant” through Alexa.