Amazon’s initiative to monetize its Alexa-enabled devices appears to be faltering, resulting in significant losses for the company. According to internal documents and sources familiar with the situation, Amazon has incurred over $25 billion in losses from its Echo, Kindle, and other devices between 2017 and 2021.
Despite attracting hundreds of millions of customers, the primary use of the Alexa-enabled Echo speakers has been for functions such as setting alarms and utilizing free applications, rather than making purchases through Amazon. A former senior employee expressed concerns about the situation, highlighting the disparity between hiring thousands of staff and the actual utility of the technology.
In response to the challenges, Amazon CEO Andy Jassy is reportedly seeking solutions, including the introduction of a paid tier for the voice assistant. However, engineers involved in the project have expressed doubts about its potential impact.
An Amazon spokesperson emphasized the importance of the value generated when customers utilize its services, stating that the Devices & Services organization has successfully established several profitable ventures for Amazon.
Concurrently, Amazon’s latest AI-enhanced version of Alexa, which was showcased in September, is reportedly not fully prepared for launch. Former employees indicate that the company lacks sufficient data and access to the necessary chips to support the advanced language model driving the new assistant. Furthermore, it seems that Amazon has shifted its focus towards developing generative AI for its cloud computing division, Amazon Web Services.
In response to critiques from former employees, Amazon contends that these assessments are inaccurate and that its Amazon Artificial General Intelligence team has the required access to both its proprietary Trainium chips and Nvidia graphics processing units. The company maintains its commitment to developing what it aims to be the world’s leading personal assistant.