Amazon’s efforts to profit from its Alexa-enabled devices have not been successful, with reports indicating the company has incurred losses in excess of $25 billion from products like Echo and Kindle between 2017 and 2021. This information comes from internal documents and sources familiar with the matter, as reported by the Wall Street Journal. Although the company boasts hundreds of millions of users for its devices, many are primarily utilizing Alexa for basic functions such as setting alarms rather than making purchases on Amazon.
A former senior Amazon employee expressed concerns, 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 seeking solutions, including the introduction of a subscription service for the voice assistant. However, some engineers involved in the development of this paid version are skeptical about its potential impact.
An Amazon spokesperson emphasized that the company is focused on creating value through its services, not solely through device sales. “Our Devices & Services organization has established numerous profitable businesses for Amazon and is well-positioned to continue doing so going forward,” the spokesperson stated.
On another front, Amazon’s new AI-enhanced version of Alexa, showcased in September, remains underdeveloped, according to former employees. Reports suggest that the company lacks sufficient data and access to the necessary chips to support the advanced large language model driving the new virtual assistant. Furthermore, Amazon has shifted its focus toward developing generative AI for its cloud computing division, Amazon Web Services.
In response to the criticisms, Amazon refuted claims made by former employees, asserting that the Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs. The company reiterated its intention to develop the world’s best personal assistant with Alexa.