Amazon’s efforts to monetize its Alexa-enabled devices have not been fruitful, resulting in significant financial losses for the company. According to reports from the Wall Street Journal, Amazon lost over $25 billion from its Echo, Kindle, and other devices between 2017 and 2021, based on internal documents and insights from anonymous sources close to the matter. Despite Amazon’s large customer base for these devices, users reportedly utilize the Echo speakers more for basic functions like setting alarms rather than shopping on Amazon.
A former senior employee expressed concern about the company’s focus, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In an effort to turn things around, Amazon CEO Andy Jassy is exploring the option of introducing a paid tier for its voice assistant. However, some engineers involved in the project reportedly doubt that this change will significantly impact the situation.
An Amazon spokesperson emphasized the company’s commitment to delivering value through its services, not just device sales. They noted that the Devices & Services organization has created several profitable ventures and is well-positioned for future success.
In addition, insights from former employees indicate that the new AI-powered version of Alexa, previewed in September, is not near completion. Challenges include a lack of sufficient data and access to the necessary chips for the large language model driving the new assistant. Furthermore, Amazon is reportedly prioritizing generative AI development for its cloud computing arm, Amazon Web Services, over the AI-enhanced Alexa.
Contrary to the claims of former employees, Amazon disputed their assessments, asserting that the Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs. The company’s overall strategy for Alexa remains focused on developing what it aims to be the world’s leading personal assistant.