Amazon’s efforts to monetize its Alexa-enabled devices have reportedly resulted in significant financial losses for the company, with losses exceeding $25 billion from 2017 to 2021, according to internal documents and sources familiar with the situation, as reported by the Wall Street Journal. Despite having hundreds of millions of customers using its devices, it appears that Amazon’s Echo speakers are primarily utilized for basic functions like setting alarms rather than facilitating purchases.
A former senior Amazon employee expressed concerns, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these challenges, Amazon CEO Andy Jassy is seeking solutions and is planning to introduce a paid tier for the Alexa service. However, some engineers involved in this development have expressed doubts about its potential impact.
An Amazon spokesperson emphasized that the company is concentrating on the value generated for customers through its services rather than solely focusing on device sales. They mentioned that the Devices & Services division has successfully established multiple profitable ventures for Amazon and is positioned for future growth.
Additionally, reports indicate that Amazon’s new AI-enhanced version of Alexa, showcased in September, may not be near completion. Insufficient data and limited access to the necessary hardware to support the advanced language model have been cited as issues, leading the company to prioritize generative AI developments within its cloud computing division, Amazon Web Services.
In contrast, Amazon has refuted claims made by its former employees, insisting that they are misinformed about the current state of its Alexa AI initiatives. The company asserted that its Artificial General Intelligence team has the required resources, including proprietary Trainium chips and Nvidia GPUs, and reiterated its intention to develop the best personal assistant available.