Amazon’s efforts to monetize its Alexa-enabled devices have 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 boasting hundreds of millions of customers, users primarily utilize their Echo speakers for basic functions like setting alarms, rather than for making purchases on Amazon.
A former senior employee expressed concerns about the company’s workforce expansion without achieving substantial returns, suggesting they had essentially created a “smart timer.” In light of these challenges, Amazon CEO Andy Jassy is seeking solutions and is contemplating the introduction of a paid tier for the voice assistant. However, some engineers working on this initiative have expressed skepticism about its potential effectiveness.
An Amazon spokesperson emphasized the importance of customer engagement with its services, stating that the Devices & Services division has successful profitable ventures and is well-positioned for future growth.
In addition, Amazon’s newly unveiled AI-powered Alexa, which was presented in September, is reportedly not yet ready for deployment. Former employees claim the company lacks sufficient data and access to necessary hardware to support the advanced large language model (LLM) for the upgraded assistant. There are also indications that Amazon has shifted its focus toward developing generative AI for its cloud services, Amazon Web Services, rather than prioritizing the AI-driven Alexa.
In response to these claims, Amazon defended its efforts, asserting that its former employees are misinformed regarding its current AI initiatives. The company stated that its Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs, maintaining its goal to create the world’s premier personal assistant.