Amazon’s efforts to generate profit from its Alexa-enabled devices have reportedly fallen short, resulting in significant losses for the company. According to internal documents and sources familiar with the situation, Amazon experienced more than $25 billion in losses from its Echo, Kindle, and other products between 2017 and 2021.
Despite having hundreds of millions of customers, usage of Echo speakers is primarily for non-commercial tasks such as setting alarms, rather than purchasing items from Amazon. A former senior employee expressed concern about the company’s hiring strategy and product impact, noting, “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 paid tier for Alexa. However, some engineers involved in this project fear it may not lead to significant improvements.
An Amazon spokesperson emphasized the company’s commitment to creating value with its services, stating, “Our Devices & Services organization has established numerous profitable businesses for Amazon and is well-positioned to continue doing so going forward.”
Additionally, reports indicate that Amazon’s new AI-enhanced Alexa, showcased in September, is not yet ready for deployment. Former employees have claimed that the company lacks sufficient data and access to the necessary processing chips for the large language model driving the new version. Amazon has reportedly shifted priorities to focus on developing generative AI for its cloud division, Amazon Web Services.
In response to these concerns, Amazon denied the claims made by former employees regarding its AI initiatives, asserting that its Artificial General Intelligence team has the required resources, including both in-house Trainium chips and Nvidia GPUs, to achieve its goal of creating the world’s leading personal assistant.