Amazon’s efforts to monetize its Alexa-enabled devices have resulted in significant losses for the company, reportedly amounting to over $25 billion from 2017 to 2021. According to the Wall Street Journal, internal documents and sources familiar with the situation indicate that despite having hundreds of millions of customers, most users engage with Alexa primarily for simple tasks like setting alarms, rather than purchasing products from Amazon.
A former senior employee expressed concerns, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to ongoing challenges, CEO Andy Jassy is exploring solutions, including the introduction of a paid subscription model for the voice assistant. However, some engineers are skeptical about the effectiveness of this approach.
An Amazon spokesperson emphasized the company’s commitment to delivering value through their services, highlighting that their Devices & Services division has successfully created profitable ventures and remains optimistic about future growth.
On another front, Amazon’s forthcoming AI-enhanced version of Alexa, which was showcased in September, is said to be far from completion. Former employees have noted that Amazon lacks sufficient data and the necessary chips to support the advanced language model driving the new assistant. Additionally, the company is reportedly prioritizing generative AI development for its cloud service, Amazon Web Services.
In response to criticism, Amazon stated that claims from former employees regarding its AI initiatives are inaccurate, insisting that the Amazon Artificial General Intelligence team has access to the required technology and remains focused on its goal of creating the premier personal assistant.