Amazon’s strategy to monetize its Alexa-enabled devices has reportedly fallen short, with the company losing over $25 billion between 2017 and 2021, according to the Wall Street Journal. Internal documents and sources close to the matter indicate that while Amazon boasts hundreds of millions of customers for its devices, most utilize the Alexa-enabled Echo speakers mainly for setting alarms and using free applications rather than for making purchases on Amazon.
“We worried we’ve hired 10,000 people and we’ve built a smart timer,” a former senior Amazon employee remarked.
In light of these losses, Amazon CEO Andy Jassy is exploring solutions, including the introduction of a paid tier for its voice assistant. However, concerns have been raised by some engineers regarding the potential effectiveness of this paid version of Alexa.
An Amazon spokesperson emphasized that the company’s focus is on the value derived from customer usage of their services, not just device sales. They highlighted the successful, profitable businesses established by the Devices & Services organization.
In another development, Amazon’s new artificial intelligence-enhanced Alexa, which was showcased in September, is reportedly far from ready, according to former employees. There are claims that the company lacks sufficient data and the necessary chips to operate the large language model that would power the upgraded virtual assistant. Furthermore, Amazon has prioritized the development of generative AI for its cloud computing service, Amazon Web Services, over the AI-driven Alexa.
Amazon has countered claims from former employees, asserting they are misinformed about the current developments in Alexa AI. The company stated that its Artificial General Intelligence team has access to in-house Trainium chips and Nvidia graphics processing units (GPUs), maintaining that the goal remains to create “the world’s best personal assistant.”