Amazon’s efforts to monetize its Alexa-enabled devices have reportedly resulted in significant financial losses, totaling over $25 billion from 2017 to 2021, according to the Wall Street Journal. Despite having millions of customers, the company finds that its Echo speakers are primarily used for basic functions like setting alarms and accessing free apps, rather than for shopping.
In response to these challenges, Amazon CEO Andy Jassy is reportedly exploring the introduction of a paid version of Alexa, although some engineers are skeptical about its potential effectiveness. An Amazon spokesperson emphasized that the company prioritizes the value created for customers rather than just device sales, highlighting existing profitable businesses within its Devices & Services division.
Additionally, Amazon’s new AI-powered version of Alexa, revealed in September, is reportedly not ready for deployment due to insufficient data and necessary hardware. Instead, the company has shifted focus towards generative AI for its cloud services division, Amazon Web Services, which has led to concerns about the progress of its virtual assistant.
Former employees have disputed Amazon’s claims, suggesting that the company lacks the required resources for its AI initiatives. However, Amazon has pushed back, asserting that its Artificial General Intelligence team has access to both proprietary chips and Nvidia GPUs, and maintains its commitment to developing the best personal assistant available.