Amazon’s efforts to monetize its Alexa-enabled devices have not yielded the expected financial success, reportedly resulting in losses amounting to over $25 billion between 2017 and 2021. According to the Wall Street Journal, internal documents and anonymous sources indicate that despite having hundreds of millions of customers, these devices are primarily used for basic functions like setting alarms, rather than shopping through Amazon.
“We worried we’ve hired 10,000 people and we’ve built a smart timer,” a former senior Amazon employee commented.
In response to these challenges, Andy Jassy, Amazon’s CEO, is seeking solutions, including the introduction of a paid tier for Alexa. However, some engineers involved in this initiative are skeptical about its potential effectiveness, as reported by the Wall Street Journal.
An Amazon spokesperson stated, “We’re focused on the value we create when customers use our services, not just when they buy our devices.” They emphasized that Amazon’s Devices & Services organization has developed several profitable ventures and remains poised for future success.
On the cutting edge of innovation, Amazon recently showcased a new AI-powered version of Alexa. However, former employees have indicated that the project is far from completion. They noted that the company lacks sufficient data and requires specific chips to operate the new large language model. Additionally, Amazon has shifted its priorities to enhance generative AI capabilities for its cloud computing division, Amazon Web Services.
In response to these claims, Amazon asserted that its past and current Alexa AI initiatives are on track, with support from both its in-house Trainium chips and Nvidia GPUs. The company reiterated its commitment to developing “the world’s best personal assistant.”