Amazon’s venture into monetizing its Alexa-enabled devices has reportedly resulted in significant financial losses, totaling over $25 billion from 2017 to 2021, according to internal documents and sources familiar with the situation. Despite having hundreds of millions of customers for its devices, users primarily utilize the Alexa-enabled Echo speakers for basic functions like setting alarms and accessing free applications rather than for shopping on Amazon.
A former senior Amazon employee expressed concerns, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to the challenges, Amazon CEO Andy Jassy is reportedly working on a solution, which may include the introduction of a paid version of Alexa. However, some engineers within the company have expressed doubts about whether this paid tier will effectively enhance the Alexa experience.
An Amazon spokesperson highlighted the company’s focus on providing value through its services beyond just device sales, asserting that their Devices & Services organization has successfully established various profitable ventures and is poised to continue this trend.
Additionally, the updated AI-powered version of Alexa, introduced in a recent demo, reportedly has not achieved readiness, facing challenges related to data access and the necessary technology to support the large language model at its core. There are concerns that Amazon has shifted its focus from AI development for Alexa to prioritize generative AI initiatives within its cloud computing division, Amazon Web Services.
In response to criticisms from former employees, Amazon stated that their insights were inaccurate, emphasizing that the Amazon Artificial General Intelligence team has access to the required chips and GPUs. The company affirmed that its vision for Alexa remains unchanged: to create the best personal assistant in the world.