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. Despite having hundreds of millions of customers for its devices, data shows that Alexa-enabled Echo speakers are primarily used for tasks like setting alarms rather than making purchases.
A former senior Amazon employee expressed concerns about the company’s hiring and product development strategy, noting that while they have invested heavily in staffing, the outcome has been less than expected. In response to these challenges, Amazon CEO Andy Jassy is looking for solutions, including the possible introduction of a paid tier for Alexa. However, there are concerns among engineers about the potential effectiveness of this new version.
An Amazon spokesperson emphasized the company’s focus on creating value through its services rather than just device sales, claiming that its Devices & Services division has successfully established several profitable ventures.
At the same time, Amazon’s new AI-powered version of Alexa appears to be far from ready, according to former employees. Reports indicate that the company lacks sufficient data and access to the necessary chips to run the advanced language model for the new assistant. Furthermore, Amazon is prioritizing the development of generative AI for its cloud computing division, Amazon Web Services, over advancements for Alexa.
Amazon disputes the claims of former employees, asserting that they are misinformed about the capabilities of its artificial intelligence initiatives and highlighting that its Artificial General Intelligence team has access to essential resources like in-house Trainium chips and Nvidia GPUs. The company reiterated its commitment to developing the best personal assistant in the market.