Amazon’s efforts to monetize its Alexa-enabled devices have reportedly resulted in significant financial losses for the company, with over $25 billion lost between 2017 and 2021, according to internal documents and sources cited by the Wall Street Journal. Despite having hundreds of millions of users for its devices, the Echo speakers equipped with Alexa are primarily used for features like setting alarms and accessing free applications rather than for shopping.
A former senior employee expressed concerns over the company’s hiring practices, suggesting that the workforce was expanded without creating substantial advancements in the product’s functionality.
In response to these challenges, Amazon CEO Andy Jassy is exploring new strategies, including the introduction of a paid subscription tier for Alexa. However, some engineers have voiced skepticism about the potential success of this initiative.
An Amazon spokesperson stated that the company prioritizes the value provided to customers through its services, not just sales from its devices, claiming that its Devices & Services division has established multiple profitable ventures and is well-positioned for future growth.
Furthermore, reports indicate that Amazon’s new AI-enhanced version of Alexa, showcased in September, is still in development and facing challenges, such as insufficient data and access to necessary technology. There are claims that the focus has shifted toward building generative AI for its Amazon Web Services cloud unit instead.
In response to criticisms from former employees regarding its AI initiatives, Amazon argues that its current Alexa AI projects are progressing effectively, with access to advanced hardware including its own Trainium chips and Nvidia GPUs. The company reiterated its commitment to creating what it seeks to be the world’s leading personal assistant.