Amazon’s strategy to generate revenue from its Alexa-enabled devices has fallen short, leading to significant financial losses for the company. According to reports from the Wall Street Journal, internal documents reveal that Amazon incurred losses exceeding $25 billion from its Echo, Kindle, and other devices between 2017 and 2021. Although Amazon boasts hundreds of millions of customers for its devices, usage statistics indicate that its Echo speakers are primarily used for tasks like setting alarms rather than for shopping on Amazon.
A former senior employee expressed concern over the company’s workforce expansion, noting, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In an effort to address these issues, Amazon CEO Andy Jassy is reportedly exploring the introduction of a paid version of its voice assistant. However, some engineers involved in this development are skeptical about its potential success.
An Amazon spokesperson defended the company’s approach, stating, “We focus on the value we create when customers use our services, not just when they buy our devices.” The spokesperson added that Amazon’s Devices & Services division has successfully established several profitable ventures and is equipped to continue this trend.
In addition, Amazon demonstrated a new AI-powered version of Alexa in September, but former employees claim it is far from ready. The company allegedly lacks sufficient data and necessary chips to support the advanced large language model (LLM) that will drive the new assistant. There are also reports that Amazon has shifted its priorities toward generative AI for its cloud service, Amazon Web Services, rather than focusing on the AI-enabled Alexa.
In response to these claims, Amazon contends that these former employees lack accurate information regarding the current state of its Alexa AI initiatives. The company insists that its Artificial General Intelligence team has access to both proprietary Trainium chips and Nvidia graphics processing units (GPUs), reaffirming its commitment to creating “the world’s best personal assistant.”