Amazon’s efforts to generate revenue from its Alexa-enabled devices have reportedly not been successful, leading to substantial losses for the company. According to internal documents and sources familiar with the situation, Amazon lost over $25 billion from its Echo, Kindle, and other smart devices between 2017 and 2021. Despite having hundreds of millions of customers using these devices, the Echo speakers are primarily utilized for mundane tasks like setting alarms rather than shopping on Amazon.
A former senior Amazon employee expressed concerns about the company having invested heavily in personnel and technology with limited payoff, remarking, “We’ve hired 10,000 people and we’ve built a smart timer.”
In response to these challenges, Amazon CEO Andy Jassy is reportedly exploring solutions, including the introduction of a paid tier for its voice assistant. However, there are doubts among Amazon engineers about whether this paid version of Alexa will bring significant improvement.
An Amazon spokesperson asserted that the company is dedicated to enhancing the value created for customers using their services and has successfully established profitable ventures within its Devices & Services division.
In addition, Amazon’s latest AI-powered version of Alexa, which was demonstrated in September, is said to be far from ready. Former employees revealed that the company lacks sufficient data and access to the necessary chips that would enable the large language model behind the new assistant. Furthermore, it seems Amazon has shifted its focus away from AI for Alexa in order to prioritize generative AI for its cloud computing branch, Amazon Web Services.
Amazon dismissed the claims made by former employees, stating that they are uninformed about current efforts and that the Amazon Artificial General Intelligence team has access to both proprietary Trainium chips and Nvidia GPUs. The company remains committed to its goal of creating the world’s best personal assistant through Alexa.