Amazon’s strategy to monetize its Alexa-enabled devices has reportedly resulted in significant financial losses, amounting to over $25 billion from 2017 to 2021, according to internal documents and sources cited by the Wall Street Journal. Despite having hundreds of millions of customers using its devices, many users primarily utilize Alexa-enabled Echo speakers for functions like setting alarms and accessing free applications, rather than for shopping on Amazon.
A former senior Amazon employee expressed concern about the effectiveness of the company’s investments, 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 exploring solutions to improve the situation, including the introduction of a paid version of its voice assistant. However, some engineers working on this project have expressed doubts about its potential impact.
An Amazon spokesperson highlighted the company’s commitment to creating value through its services, emphasizing that its Devices & Services division has established profitable business lines and is poised for future success.
Additionally, concerns have been raised about the readiness of Amazon’s new AI-powered Alexa, which was demoed in September. Former employees have indicated that the company lacks sufficient data and access to the necessary chips to support the large language model driving this new iteration of Alexa. As a result, Amazon is reportedly prioritizing generative AI development for its cloud services division, Amazon Web Services, over advancing the AI-powered version of Alexa.
In response, Amazon refuted claims made by former employees, asserting that the Amazon Artificial General Intelligence team has access to essential resources, including in-house Trainium chips and Nvidia graphics processing units (GPUs). The company maintains that its goal for Alexa remains to develop “the world’s best personal assistant.”