Amazon’s strategy to monetize its Alexa-enabled devices has proven to be costly, leading to an estimated loss of over $25 billion from 2017 to 2021. Internal documents and sources familiar with the matter reveal that despite having hundreds of millions of customers, many users primarily utilize Alexa-enabled Echo speakers for basic functions like setting alarms rather than for shopping on Amazon.
Concerns have been raised within the company, with a former senior employee stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these challenges, CEO Andy Jassy is reportedly exploring the introduction of a paid tier for Alexa, yet there are doubts among engineers about its potential success.
An Amazon spokesperson emphasized the company’s commitment to creating value for customers through its services, asserting that the Devices & Services organization has established several profitable ventures.
In addition, Amazon’s new AI-driven version of Alexa, showcased in September, is said to be unprepared, with former employees citing insufficient data and access to necessary chips for the large language model. The company has allegedly shifted focus from AI-powered Alexa to developing generative AI for Amazon Web Services.
Amazon has countered these claims, stating that its former employees lack current information on the Alexa AI initiative, asserting that the Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs. The company remains determined to create what it describes as the world’s best personal assistant.