Amazon’s strategy to monetize its Alexa-enabled devices has reportedly resulted in substantial losses for the company, totaling over $25 billion from 2017 to 2021, according to internal documents and anonymous sources cited by the Wall Street Journal. Despite having hundreds of millions of customers for its devices, the Echo speakers are primarily used for basic functions like setting alarms, rather than for making purchases on Amazon.
A former senior employee expressed concerns, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In an effort to improve the situation, CEO Andy Jassy is reportedly exploring the introduction of a paid version of the voice assistant. However, some engineers involved in this project remain skeptical about its potential impact.
An Amazon spokesperson emphasized the company’s focus on the value generated from services used by customers, not just device sales. They stated that Amazon’s Devices & Services division has successfully created profitable businesses and is well-positioned for future success.
In addition, Amazon’s latest AI-enhanced version of Alexa, unveiled in September, is reportedly not yet ready for deployment. Former employees note that the company lacks sufficient data and the necessary chips to support the advanced language model driving the new assistant. Furthermore, Amazon appears to have shifted its priorities towards developing generative AI for its cloud computing sector, Amazon Web Services.
In response to these claims, Amazon refuted the assertions of former employees, asserting that its Artificial General Intelligence team has access to essential resources, including in-house chips and Nvidia GPUs. The company maintains that its goal for Alexa continues to be building “the world’s best personal assistant.”