Amazon’s efforts to monetize its Alexa-enabled devices have reportedly resulted in significant losses for the company, amounting to over $25 billion between 2017 and 2021. Internal documents and sources familiar with the situation indicate that despite having hundreds of millions of customers using these devices, the majority of users utilize the Echo speakers primarily for setting alarms and using free applications rather than for making purchases on Amazon.
Former Amazon employees expressed concerns about the company’s hiring practices and the functionality of its devices, with one stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to these challenges, CEO Andy Jassy is exploring new strategies, including the introduction of a paid tier for its voice assistant. However, some engineers within the company are skeptical about whether this change will yield significant improvements.
An Amazon spokesperson emphasized the company’s focus on the value delivered through its services, rather than solely device sales. They noted that the Devices & Services organization has successfully created profitable ventures for Amazon and is well-positioned for continued success.
On another front, concerns have been raised about the readiness of Amazon’s new AI-powered version of Alexa, demonstrated in September. Former employees reported that the project is still far from completion, lacking sufficient data and access to the necessary chips to operate the large language model. According to reports, Amazon has shifted its priorities to concentrate on generative AI for its cloud computing division, Amazon Web Services.
Amazon has countered these claims, stating that its former employees are misinformed about the current state of Alexa’s AI development. The company asserts that its Artificial General Intelligence team has access to both in-house chips and Nvidia GPUs, maintaining its commitment to creating the best personal assistant in the world.