Amazon’s strategy to monetize its Alexa-enabled devices has reportedly led to significant financial losses, amounting to more than $25 billion from 2017 to 2021. This information comes from internal documents and sources familiar with the situation, as reported by the Wall Street Journal. Although Amazon boasts hundreds of millions of customers for its devices, it appears that users primarily utilize the Alexa-supported Echo speakers for basic functions like setting alarms, rather than shopping on Amazon.
A former senior Amazon employee expressed concerns, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these challenges, Amazon CEO Andy Jassy is reportedly seeking solutions, including the introduction of a paid tier for the voice assistant. However, some engineers involved in the paid version of Alexa have expressed skepticism about its potential impact.
An Amazon spokesperson emphasized the company’s focus on creating value for customers through its services, rather than solely depending on device sales. They mentioned that the Devices & Services division has already established several profitable ventures for the company.
On another front, Amazon’s new artificial intelligence-enhanced version of Alexa, showcased in September, is said to still be in developmental stages. Reports indicate that the company lacks sufficient data and access to necessary chips for the advanced language model. Additionally, Amazon is allegedly prioritizing generative AI projects for its cloud computing division, Amazon Web Services, over the upgraded Alexa.
Amazon has countered claims made by former employees regarding its AI developments, asserting that the Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs. The company reiterated its commitment to building what it aims to be the world’s best personal assistant.