Amazon’s efforts to monetize its Alexa-enabled devices have reportedly fallen short, costing the company billions. According to internal documents cited by the Wall Street Journal, Amazon incurred losses exceeding $25 billion from its Echo, Kindle, and related devices between 2017 and 2021. Although Amazon possesses a significant base of customers for these devices, users primarily utilize the Echo speakers for basic functions like setting alarms rather than for shopping.
A former senior Amazon employee expressed concerns, noting, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response, CEO Andy Jassy is seeking solutions and is contemplating the introduction of a paid version of the voice assistant. However, some engineers have doubts about the potential impact of this initiative.
An Amazon spokesperson clarified, “We are focused on the value we create when customers use our services, not just when they buy our devices.” The spokesperson emphasized that the Devices & Services organization has developed several profitable businesses for Amazon and is poised to continue this growth.
In addition, reports indicate that improvements to Amazon’s AI-driven Alexa, showcased in September, are still a work in progress. Former employees allege that the company lacks adequate data and access to the necessary chips to support the advanced language model for the new assistant. Furthermore, it appears Amazon has shifted its priorities to concentrate on developing generative AI for its cloud division, Amazon Web Services.
In response to these claims, Amazon stated that its former employees are misinformed regarding its current AI initiatives and asserted that the Amazon Artificial General Intelligence team has the required access to both in-house Trainium chips and Nvidia GPUs, maintaining its commitment to creating the leading personal assistant.