Amazon’s efforts to monetize its Alexa-enabled devices have reportedly resulted in significant financial losses, with the company experiencing over $25 billion in losses from its Echo, Kindle, and other devices between 2017 and 2021, according to a report from the Wall Street Journal. Despite having hundreds of millions of customers, usage of the Echo speakers is primarily focused on basic functions like setting alarms rather than generating sales through shopping on Amazon.
A former senior employee expressed concerns regarding the company’s investment in staffing and technological capabilities, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to this challenge, Amazon CEO Andy Jassy is exploring solutions, including the introduction of a paid version of its voice assistant. However, engineers working on this project have expressed doubts about its potential effectiveness.
An Amazon spokesperson emphasized the company’s commitment to creating value through its services beyond mere device sales, highlighting the profitability of its Devices & Services division and its ongoing potential for future success.
Additionally, Amazon’s new AI-driven version of Alexa, showcased in September, is reportedly still underdeveloped, lacking sufficient data and access to the necessary technology to operate the large language model. The company has also shifted focus towards enhancing generative AI capabilities for its cloud computing unit, Amazon Web Services.
In response to criticisms, Amazon has refuted claims made by former employees, asserting that the Amazon Artificial General Intelligence team has access to required technology, including in-house Trainium chips and Nvidia GPUs, and reaffirmed its commitment to developing the world’s best personal assistant.