Amazon’s strategy to monetize its Alexa-enabled devices appears to have fallen short, reportedly costing the company over $25 billion from 2017 to 2021. Internal documents and sources familiar with the situation, as reported by the Wall Street Journal, highlighted that despite the widespread use of devices like the Echo and Kindle among hundreds of millions of customers, the primary functions of these Alexa-enabled devices consist of basic tasks such as setting alarms rather than facilitating shopping on Amazon.
A former senior Amazon employee expressed concerns about the lack of effective monetization, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” As CEO Andy Jassy seeks solutions, Amazon is preparing to introduce a paid version of its voice assistant. However, some engineers involved in the project reportedly doubt its potential impact.
An Amazon spokesperson emphasized the company’s focus on the value created through service usage, rather than solely device sales, pointing out that the Devices & Services sector has successfully established profitable ventures for the company.
In addition, Amazon’s upcoming AI-enhanced version of Alexa, showcased in September, is allegedly far from completion. Former employees indicated that the company lacks sufficient data and the necessary chips to support the new large language model. Reports suggest that Amazon is shifting its priorities to enhance generative AI capabilities within its cloud computing division, Amazon Web Services.
In response to these claims, Amazon refuted the assertions made by its former employees, stating that they are misinformed about the Alexa AI developments. The company affirmed that its Artificial General Intelligence team has access to both proprietary Trainium chips and Nvidia GPUs, maintaining its commitment to building the world’s leading personal assistant.