Amazon’s efforts to monetize its Alexa-enabled devices have reportedly resulted in significant financial losses for the company, amounting to over $25 billion from 2017 to 2021. This information comes from internal documents and sources familiar with the situation, according to a report by the Wall Street Journal. While Amazon has attracted hundreds of millions of customers for its devices, many users utilize Alexa primarily for basic functions like setting alarms rather than for shopping.
A former senior Amazon employee expressed concerns about the company’s investments, noting that despite hiring many engineers, the outcome has been underwhelming. In response, Amazon’s CEO Andy Jassy is reportedly exploring a paid version of Alexa, although some engineers working on this project are skeptical about its potential impact.
An Amazon spokesperson emphasized that the company is focused on the overall value generated when customers engage with its services, not just through the sale of devices. They highlighted the profitability of Amazon’s Devices & Services division and its capability to sustain that success.
However, there are challenges facing Amazon’s new AI-enhanced Alexa, which was showcased in September. Former employees claim that the AI system is far from ready due to insufficient data and shortcomings in accessing necessary technology. Amazon has reportedly shifted its focus towards generative AI for its cloud sector, Amazon Web Services.
In response to these criticisms, Amazon has stated that former employees may be misinformed about the current capabilities of its Alexa AI initiatives. The company reassured that its Artificial General Intelligence team has access to adequate resources, including in-house chips and Nvidia GPUs, and remains committed to developing the premier personal assistant.