Amazon’s attempts to monetize its Alexa-enabled devices appear to have backfired, costing the company over $25 billion between 2017 and 2021, according to a report by the Wall Street Journal. Internal documents and sources familiar with the matter indicate that, despite having hundreds of millions of customers, most users primarily utilize their Echo speakers for basic functions like setting alarms rather than making purchases on Amazon.
A former senior employee expressed concerns about the outcome of hiring 10,000 staff only to create a device that serves mainly as a smart timer. In response to the financial downturn, Amazon CEO Andy Jassy is reportedly exploring a subscription model for Alexa, but engineers working on this paid version have voiced skepticism about its potential effectiveness.
An Amazon spokesperson emphasized the company’s commitment to delivering value through its services beyond just device sales. They noted that the Devices & Services division has established several profitable business avenues and is well-positioned for future success.
On another front, Amazon’s upcoming AI-powered Alexa, showcased in September, is allegedly not ready for release due to insufficient data and a lack of necessary chips for the advanced language model, as reported by Fortune. There are claims that Amazon has shifted its focus from Alexa to developing generative AI for its cloud services, Amazon Web Services.
In defense of its efforts, Amazon refuted the claims from former employees, stating that its Artificial General Intelligence team has access to both in-house technology and Nvidia GPUs. The company maintains that its goal remains to create the best personal assistant in the world.