Amazon’s efforts to monetize its Alexa-enabled devices have not yielded the desired results, leading to significant financial losses for the company. Reports indicate that Amazon lost over $25 billion on products such as the Echo and Kindle from 2017 to 2021, according to internal documents and sources familiar with the situation.
Despite boasting hundreds of millions of customers for its devices, the Alexa-enabled Echo speakers are primarily used for basic functions like setting alarms rather than facilitating shopping on Amazon. A former senior employee expressed concerns about the effectiveness of these devices, highlighting a mismatch between staffing and the actual functionality provided.
In response to these challenges, CEO Andy Jassy is seeking solutions, including the introduction of a paid tier for the voice assistant. However, some engineers involved in the project are skeptical about its potential impact.
An Amazon spokesperson emphasized the importance of the overall value created for customers using their services, rather than focusing solely on device sales. The company claims its Devices & Services division has successfully established multiple profitable ventures and is positioned for continued success.
Additionally, Amazon’s new AI-driven version of Alexa, showcased in September, reportedly remains underdeveloped, according to former employees who mentioned a lack of sufficient data and access to necessary technology. It appears that Amazon has shifted its focus toward developing generative AI for its cloud services under Amazon Web Services.
Amazon has refuted claims made by former employees, asserting that their insights into the current state of Alexa’s AI initiatives are inaccurate. The company assures that its Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs and remains committed to creating “the world’s best personal assistant.”