Amazon’s efforts to monetize its Alexa-enabled devices have reportedly not been successful, resulting in substantial financial losses for the company, estimated at over $25 billion between 2017 and 2021. This information comes from internal documents and sources familiar with the situation, as reported by the Wall Street Journal.
Despite a vast customer base for its devices, many users primarily utilize the Alexa-enabled Echo speakers for basic functions like setting alarms rather than engaging in shopping on Amazon. A former senior employee highlighted concerns about the effectiveness of these investments, suggesting that significant resources were allocated without achieving desired results.
In response to these challenges, Amazon CEO Andy Jassy is reportedly exploring solutions, including the introduction of a paid version of its voice assistant. However, some engineers are skeptical about whether this new model will substantially change the current trajectory.
An Amazon spokesperson emphasized the company’s commitment to creating value through its services, stating that the Devices & Services organization has established numerous profitable ventures and is poised to continue this growth.
Additionally, the much-anticipated AI-powered version of Alexa, which was showcased in September, is said to be far from ready, according to former employees. Reports indicate that Amazon lacks sufficient data and access to necessary chips to effectively power the new large language model for Alexa. Furthermore, Amazon appears to be prioritizing generative AI development for its cloud computing division, Amazon Web Services, over advancing the AI capabilities of Alexa.
In response to these claims, Amazon has asserted that former employees are misinformed about the current state of its AI initiatives and clarified that its Artificial General Intelligence team has access to essential processing units. The company remains committed to its goal of developing the leading personal assistant on the market.