Amazon’s efforts to monetize its Alexa-enabled devices have reportedly resulted in significant financial losses, with the company losing over $25 billion from its Echo, Kindle, and other devices between 2017 and 2021, according to the Wall Street Journal, which cites internal documents and unnamed sources. Despite attracting hundreds of millions of customers, the Alexa-enabled Echo speakers are frequently used for simple tasks like setting alarms rather than for making purchases on Amazon.
A former senior Amazon employee expressed concern about the situation, 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 exploring solutions, including the introduction of a paid tier for Alexa. However, some engineers involved in developing this version of the voice assistant are skeptical about its potential to drive significant change.
An Amazon spokesperson emphasized that the company is focused on the value created through its services beyond device sales, asserting that the Devices & Services division has established several profitable ventures and is well-equipped for future success.
Additionally, concerns have emerged regarding the new AI-powered version of Alexa, which was demoed in September. Former employees reported that it is far from ready, lacking sufficient data and the necessary chips to operate the new large language model. Amazon has also reportedly shifted its focus from the AI-enhanced Alexa to developing generative AI capabilities for its cloud computing segment, Amazon Web Services.
In response to these claims, Amazon stated that its former employees are misinformed regarding the current state of Alexa’s AI development and that the Amazon Artificial General Intelligence team has access to in-house Trainium chips and Nvidia GPUs. The company remains committed to its goal of creating the world’s best personal assistant with Alexa.