Amazon’s efforts to monetize its Alexa-enabled devices have allegedly fallen short, resulting in significant financial losses for the company. According to reports, between 2017 and 2021, Amazon incurred losses exceeding $25 billion on products like the Echo and Kindle.
Despite having hundreds of millions of customers for its devices, it seems that the Alexa-enabled Echo speakers are primarily utilized for basic functions like setting alarms rather than for shopping-related activities. An anonymous former Amazon employee expressed concerns regarding the company’s focus, suggesting that after hiring a large workforce, they ended up creating a simple timer.
CEO Andy Jassy is reportedly seeking solutions to address these challenges and is considering introducing a paid version of the Alexa voice assistant. However, some engineers involved in this initiative harbor doubts about its potential effectiveness.
An Amazon representative emphasized that the company’s strategy centers on the value created for customers beyond just device purchases. They noted that Amazon’s Devices & Services organization has successfully developed other profitable business avenues.
Furthermore, reports indicate that Amazon’s new AI-enhanced version of Alexa, showcased in September, is not yet ready for launch. Insiders claim the company lacks sufficient data and the necessary technology infrastructure to support the new large language model. Additionally, Amazon has reportedly shifted its focus to developing generative AI capabilities for its cloud services unit, Amazon Web Services.
In response to these criticisms, Amazon contends that the insights from former employees are misguided. The company asserts that its Artificial General Intelligence team has access to critical resources, including proprietary Trainium chips and Nvidia GPUs, and that its commitment to creating an exemplary virtual assistant remains unchanged.