Amazon’s efforts to monetize its Alexa-enabled devices have reportedly led to significant financial losses for the company, estimated at over $25 billion between 2017 and 2021, according to internal documents and unnamed sources cited by the Wall Street Journal. Although Amazon boasts hundreds of millions of customers for its devices, usage of the Alexa-enabled Echo speakers has largely centered around basic functions like setting alarms rather than facilitating shopping on Amazon.
A former senior Amazon employee expressed concerns about the direction of the project, noting that the company has invested heavily in staffing yet has primarily developed basic functionalities. In response to these challenges, Amazon CEO Andy Jassy is reportedly seeking solutions, including the potential launch of a paid version of Alexa. However, some engineers involved in this initiative have raised doubts about its potential success.
An Amazon spokesperson emphasized the company’s focus on creating value for customers beyond device sales, asserting that its Devices & Services division has established several profitable business models and is well-positioned for future growth.
Additionally, concerns have arisen regarding the development of Amazon’s next-generation AI-powered Alexa. Former employees have indicated that the new version is not close to being functional, citing a lack of sufficient data and adequate hardware, specifically the necessary chips to support the advanced language model. Amazon has reportedly shifted its focus towards enhancing generative AI for its cloud computing service, Amazon Web Services.
In response to these claims, Amazon has disputed the assertions made by former employees, stating that the team dedicated to Artificial General Intelligence has access to the required Trainium chips and Nvidia GPUs. The company remains committed to its goal of creating the world’s leading personal assistant.