Amazon’s efforts to monetize its Alexa-enabled devices have faced significant challenges, leading to reported losses of over $25 billion between 2017 and 2021, according to internal documents and sources cited by the Wall Street Journal. Despite boasting hundreds of millions of users of devices like the Echo and Kindle, many customers primarily use the Echo for basic functions such as setting alarms rather than for shopping.
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 these challenges, Amazon CEO Andy Jassy is seeking solutions, including the introduction of a paid tier for its voice assistant. However, some engineers working on this new version of Alexa have expressed doubts about its potential success.
An Amazon spokesperson emphasized the company’s focus on customer value rather than just device sales, noting that its Devices & Services division has established several profitable ventures and remains optimistic about future prospects.
Additionally, Amazon’s new AI-driven version of Alexa, showcased in September, is reportedly not ready for deployment, as former employees mentioned shortcomings in data availability and access to the necessary technology. The company is said to be shifting its focus toward generative AI for its cloud service, Amazon Web Services, rather than prioritizing the upgraded Alexa.
In response to the criticism, Amazon asserted that the claims from former employees are inaccurate and that its AI initiatives for Alexa are ongoing, with access to both proprietary chips and Nvidia GPUs. The company’s objective remains to develop what it claims will be the world’s leading personal assistant.