Amazon’s attempts to generate revenue from its Alexa-enabled devices have reportedly fallen short, leading to substantial financial losses for the company. According to a report from the Wall Street Journal, the online retail giant lost over $25 billion on products such as Echo and Kindle between 2017 and 2021, based on internal documents and anonymous sources.
Despite boasting hundreds of millions of customers for its devices, users primarily utilize Alexa-enabled Echo speakers for functions like setting alarms rather than making purchases on Amazon. A former senior employee expressed concerns about the effectiveness of their hiring practices, 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, with plans to introduce a paid tier for the voice assistant. However, some engineers involved in this initiative fear it may not significantly alter the situation.
An Amazon spokesperson affirmed the company’s focus on delivering value to users through its services, emphasizing that the Devices & Services division has created numerous profitable ventures for the company and is expected to continue doing so.
Additionally, reports indicate that Amazon’s upcoming AI-powered Alexa, which was showcased in September, is not yet fully developed. Former employees suggest that the company lacks sufficient data and necessary chips to operate the large language model for the new assistant version. Instead, Amazon is prioritizing generative AI advancements for its cloud computing sector, Amazon Web Services.
In response to these criticisms, Amazon refuted claims from former employees, asserting that the Amazon Artificial General Intelligence team has access to appropriate technology, including in-house Trainium chips and Nvidia GPUs. The company’s objective for Alexa remains unchanged: to create the world’s most advanced personal assistant.