Amazon’s efforts to monetize its Alexa-enabled devices have reportedly resulted in significant financial losses, amounting to over $25 billion from 2017 to 2021, according to internal documents and sources familiar with the situation, as reported by the Wall Street Journal. Despite having hundreds of millions of customers, the company’s Echo speakers, which utilize the Alexa voice assistant, are primarily used for basic functions like setting alarms and accessing free applications, rather than for making purchases on Amazon.
A former senior employee expressed concerns about the company’s direction, highlighting that after hiring 10,000 people and developing a sophisticated timer, the intended outcomes were not being met. In response to the losses, Amazon CEO Andy Jassy is reportedly exploring a paid subscription for Alexa. However, some engineers working on this paid version are doubtful it will lead to meaningful improvement.
An Amazon spokesperson emphasized the company’s commitment to creating value through its services beyond just device sales, noting that the Devices & Services division has successfully established various profitable ventures and is well-positioned for future growth.
In parallel, Amazon’s new AI-enhanced version of Alexa, which was previewed in September, is said to be far from completion, with former employees stating that the company lacks sufficient data and access to the necessary chips for its large language model. Furthermore, Amazon is reportedly prioritizing the development of generative AI for its cloud division, Amazon Web Services, over progressing with AI for Alexa.
Amazon has contested these claims from former employees, asserting that they are misinformed regarding the current state of its AI initiatives and that its Amazon Artificial General Intelligence team has access to both proprietary Trainium chips and Nvidia GPUs. The company maintains its commitment to developing what it aims to be the best personal assistant in the world.