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 cited by the Wall Street Journal. Despite having hundreds of millions of customers using devices like the Echo and Kindle, the usage of Alexa is more geared towards non-commercial tasks, such as setting alarms, rather than shopping on Amazon.
A former senior Amazon employee voiced concerns about the investments made, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to the disappointing performance of its devices, CEO Andy Jassy is reportedly seeking solutions, which include the introduction of a paid version of Alexa. However, some engineers are skeptical that the paid tier will significantly impact the device’s performance or profitability.
An Amazon spokesperson emphasized that the company is focused on the value created through customer engagement with its services rather than solely device sales, citing successful businesses developed within its Devices & Services organization.
Furthermore, the new AI-powered version of Alexa showcased in September is said to be far from completion, as former employees noted a lack of sufficient data and access to the chips necessary for operating the large language model. The company is allegedly prioritizing generative AI development for its Amazon Web Services cloud unit over the advancements of Alexa.
Amazon has responded to these claims from former employees, asserting that they are misinformed about the current state of Alexa’s AI development, and assured that the Amazon Artificial General Intelligence team has access to both internal Trainium chips and Nvidia GPUs. The company’s overarching goal for Alexa remains to create the world’s best personal assistant.