Amazon’s strategy to profit from its Alexa-enabled devices has reportedly not been successful, resulting in substantial financial losses for the company. According to internal documents and sources familiar with the situation, the online retail giant lost over $25 billion between 2017 and 2021 from its Echo, Kindle, and other devices. Despite counting hundreds of millions of users, the Alexa-enabled Echo speakers are primarily utilized for simple tasks like setting alarms, rather than for shopping on Amazon.
A former senior Amazon employee expressed concerns about the company’s hiring practices and the effectiveness of the devices, 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 and is reportedly planning to introduce a paid version of its voice assistant. However, some engineers involved in developing this paid version have expressed doubts about its potential impact.
An Amazon spokesperson emphasized that the company is focused on the value created for customers through its services, not just device sales. They noted that the Devices & Services organization has established several profitable ventures and is well-positioned for future success.
Additionally, Amazon’s new AI-driven version of Alexa, showcased in September, is reportedly not close to completion, as former employees suggest the company lacks sufficient data and the necessary chips to operate the advanced language model. Instead, Amazon is prioritizing efforts on generative AI for its cloud computing unit, AWS.
In response to these claims, Amazon disputed the accuracy of the statements made by former employees, asserting that its Artificial General Intelligence team has access to essential resources, including in-house chips and Nvidia GPUs. The company reiterated its commitment to developing “the world’s best personal assistant.”