Amazon’s efforts to profit from its Alexa-enabled devices have reportedly resulted in substantial financial losses, with estimates suggesting the company has lost over $25 billion from products like the Echo and Kindle between 2017 and 2021. Despite a robust customer base, internal documents reveal that many users primarily utilize the Echo speakers for basic functions such as setting alarms, rather than for shopping activities.
Concerned about these losses, Amazon CEO Andy Jassy is exploring solutions, including the introduction of a paid tier for the Alexa voice assistant. However, sources indicated that some engineers doubt the potential impact of this paid version.
An Amazon spokesperson stated that the company is concentrating on the value provided to customers through its services, not merely on device sales. They emphasized the establishment of profitable ventures within the Devices & Services organization.
In addition, the company’s latest AI-driven Alexa, showcased in September, is reportedly far from being fully functional. Former employees expressed concerns that Amazon lacks sufficient data and essential technology, including chips necessary for the large language model that powers the new assistant. Furthermore, reports suggest that Amazon is prioritizing the development of generative AI for its AWS division over Alexa’s advancements.
In response to these claims, Amazon has asserted that its former employees are misinformed and that the Amazon Artificial General Intelligence team has access to the required technology, including its own Trainium chips and Nvidia GPUs. The company remains committed to its goal of developing an exceptional personal assistant.