Amazon’s efforts to generate revenue from its Alexa-enabled devices have reportedly fallen short, resulting in significant financial losses for the company. According to internal documents and sources familiar with the situation, Amazon lost over $25 billion from its Echo, Kindle, and similar devices between 2017 and 2021. While the tech giant has attracted hundreds of millions of customers to its devices, the usage of Alexa-enabled Echo speakers is mainly focused on simple tasks like setting alarms rather than driving purchases on Amazon.
One former senior Amazon employee expressed concerns, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In light of these challenges, Amazon CEO Andy Jassy is seeking solutions, including the introduction of a paid version of the voice assistant. However, some engineers working on this paid version have expressed skepticism about its potential impact.
An Amazon spokesperson emphasized the company’s commitment to creating value for customers using its services, stating that the Devices & Services organization has established several profitable ventures. The spokesperson added that they are well-positioned for future success.
In addition, a new AI-powered version of Alexa, showcased in September, is reportedly far from completion, with former employees indicating that the company lacks sufficient data and access to the necessary hardware for its large language model. Furthermore, Amazon has shifted its priorities towards developing generative AI for its cloud computing division, Amazon Web Services.
Amazon has refuted claims made by former employees, asserting that they are misinformed about the progress of Alexa’s AI capabilities and that the Amazon Artificial General Intelligence team has access to the required chips to support its objectives. The company’s overarching goal remains to develop the best personal assistant in the market.