Amazon’s strategy to monetize its Alexa-enabled devices has reportedly resulted in significant financial losses, totaling over $25 billion between 2017 and 2021, according to the Wall Street Journal, which cited internal documents and anonymous sources. Despite boasting hundreds of millions of customers, it appears that users primarily utilize Amazon’s Echo speakers for basic functions like setting alarms rather than making purchases through the platform.
A former senior employee expressed concern about the situation, noting that despite hiring thousands of people, Amazon seemed to have merely created a “smart timer.” In response to these challenges, CEO Andy Jassy is reportedly seeking solutions, including the introduction of a paid version of the Alexa voice assistant. However, engineers involved in this project are skeptical about its potential impact.
An Amazon spokesperson emphasized that the company is focused on the value created through its services rather than solely on device sales, highlighting that the Devices & Services division has established profitable ventures and is positioned for future success.
On another front, Amazon’s latest AI-enhanced version of Alexa, unveiled in September, is reportedly not yet ready for launch. Former employees indicated that the company lacks sufficient data and access to the necessary chips for the large language model driving this advancement. Furthermore, Amazon has reportedly shifted its focus toward developing generative AI for its cloud computing segment, Amazon Web Services.
In response to these claims, Amazon defended its efforts, stating that its former employees are misinformed and that the Amazon Artificial General Intelligence team has access to the essential in-house Trainium chips and Nvidia GPUs. The company’s objective for Alexa remains to create the leading personal assistant worldwide.