Amazon’s strategy to monetize its Alexa-enabled devices has reportedly not succeeded, leading to significant financial losses for the company. According to the Wall Street Journal, internal documents reveal that Amazon lost over $25 billion on products such as the Echo and Kindle between 2017 and 2021. Although Amazon has attracted hundreds of millions of users for these devices, it appears that the Echo speakers are primarily utilized for setting alarms and using free applications, rather than facilitating purchases on Amazon.
A former senior employee at Amazon expressed concerns, saying, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to these challenges, Amazon’s CEO Andy Jassy is seeking solutions and plans to introduce a paid tier for the Alexa voice assistant. However, reports indicate that some engineers working on this upgraded version of Alexa are skeptical about its potential effectiveness.
An Amazon spokesperson stated, “We are focused on the value we create when customers use our services, not just when they buy our devices.” They highlighted that the Devices & Services division has successfully established numerous profitable ventures for Amazon.
Furthermore, Amazon’s new AI-enhanced version of Alexa, which was showcased in September, is reportedly not ready for launch. Ex-employees claim that the company lacks sufficient data and access to the necessary chips to support the advanced language model behind the new iteration. Additionally, Amazon is said to have shifted its priorities to focus on generative AI for its cloud computing segment, Amazon Web Services.
In response to these claims, Amazon asserted that its former employees are misinformed regarding its current AI initiatives for Alexa, emphasizing that the Amazon Artificial General Intelligence team has the resources needed to develop the technology. The company’s objective remains to create “the world’s best personal assistant.”