Amazon’s strategy to generate revenue through its Alexa-enabled devices has reportedly resulted in significant financial losses for the company, amounting to over $25 billion between 2017 and 2021. According to internal documents and sources familiar with the situation, the company has not achieved the anticipated success with its Echo, Kindle, and other devices. While Amazon has attracted hundreds of millions of customers, it appears that many users primarily utilize the Alexa-enabled Echo devices for simple tasks such as setting alarms rather than for shopping.
A former senior employee expressed concerns about the company’s hiring and investment efforts, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to these challenges, Amazon’s CEO Andy Jassy is reportedly seeking solutions, including the introduction of a paid version of the voice assistant. However, some engineers involved in its development doubt its potential effectiveness.
An Amazon spokesperson commented that the company is concentrating on the value provided through its services rather than merely device sales, highlighting that their Devices & Services division has created numerous profitable ventures.
In addition, Amazon’s newly designed AI-powered Alexa, showcased in September, is said to be far from being ready, with former employees noting a lack of necessary data and hardware for its large language model. The company has supposedly shifted its focus towards generative AI for its Amazon Web Services cloud division.
However, Amazon disputes claims made by former employees, asserting they are misinformed regarding its current AI initiatives. The company insists that its Artificial General Intelligence team has access to both its proprietary Trainium chips and Nvidia GPUs. Amazon maintains its goal of creating the world’s leading personal assistant remains unchanged.