Amazon’s initiative to monetize its Alexa-enabled devices has not yielded the intended results, and has reportedly resulted in significant financial losses for the company, amounting to over $25 billion from 2017 to 2021. According to the Wall Street Journal, internal documents and anonymous sources indicate that despite having hundreds of millions of customers utilizing devices like Echo and Kindle, the primary functions of these devices are setting alarms and using free applications, rather than generating sales through shopping.
A former senior employee remarked on the situation, expressing concern over the resources allocated to Alexa’s development, including the hiring of 10,000 new staff members for what they referred to as a “smart timer.”
In response to these challenges, Amazon’s CEO Andy Jassy is reportedly exploring solutions, including the introduction of a paid version of its voice assistant. However, some engineers involved in this project have voiced skepticism about its potential effectiveness.
An Amazon spokesperson highlighted the company’s focus on the value delivered through usage, rather than just device sales, asserting that the Devices & Services organization has already established profitable ventures and is poised for future success.
In addition, reports suggest that the new AI-enhanced version of Alexa, demonstrated in September, is not yet ready for deployment due to insufficient data and a lack of access to necessary chips for its underlying large language model. Amazon has allegedly shifted its priorities towards generative AI for its cloud computing service, Amazon Web Services.
The company has countered claims from former employees, stating that they are misinformed regarding Alexa’s AI development. Amazon maintains that its Artificial General Intelligence team has adequate access to both in-house chips and Nvidia GPUs, reaffirming its commitment to creating the leading personal assistant in the market.