Amazon’s aspiration to monetize its Alexa-enabled devices has fallen short, resulting in substantial financial losses for the company. According to internal documents and sources cited by the Wall Street Journal, Amazon lost over $25 billion from its Echo, Kindle, and other devices between 2017 and 2021. Despite boasting hundreds of millions of device owners, data reveals that many users primarily utilize Alexa-enabled Echo speakers for simple tasks like setting alarms rather than shopping on Amazon.
Concerns about the effectiveness of the investment were voiced by a former senior employee, who remarked on the vast number of hires alongside the limited utility of the devices. In response to these challenges, Amazon’s CEO Andy Jassy is reportedly exploring solutions, including a new paid tier for the voice assistant. However, some engineers working on this version have expressed doubts about its potential impact.
An Amazon spokesperson emphasized the company’s focus on the value generated when customers engage with its services, rather than solely through device sales. They asserted that Amazon’s Devices & Services organization has successfully established several profitable ventures and remains poised for future success.
In addition, reports indicate that Amazon’s latest AI-enhanced version of Alexa, showcased in September, is still far from ready for launch. Former employees suggest that the company faces challenges with data access and the necessary technology to support this upgrade. Furthermore, Amazon has chosen to prioritize generative AI development for its cloud computing division, Amazon Web Services, over advancing the AI version of Alexa.
In response to these claims, Amazon refuted the assertions made by former employees, stating that its Artificial General Intelligence team has access to the required technical resources, including in-house Trainium chips and Nvidia GPUs. The company’s commitment to developing an exceptional personal assistant remains steadfast.