Amazon’s efforts to monetize its Alexa-enabled devices have reportedly resulted in significant financial losses, amounting to over $25 billion between 2017 and 2021, according to internal documents and sources familiar with the situation. While the tech giant boasts hundreds of millions of device owners, it appears that many users primarily utilize Alexa-enabled Echo speakers for basic tasks such as setting alarms instead of shopping on Amazon.
A former senior employee expressed concerns about the company’s investments, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to these losses, Amazon CEO Andy Jassy is reportedly exploring solutions, including the introduction of a paid subscription tier for Alexa. However, some engineers involved in the development of this premium version of the voice assistant remain skeptical about its potential impact on the company’s financial performance.
An Amazon spokesperson commented that the company focuses on the overall value created for customers using its services, rather than solely emphasizing device sales. They highlighted that the Devices & Services division has established several profitable businesses and is positioned for future success.
Simultaneously, Amazon’s latest AI-powered version of Alexa, showcased in September, is reportedly not yet ready for deployment. Former employees indicated a lack of sufficient data and essential chips required for the advanced language model that powers the new assistant. The company appears to be diverting resources from Alexa’s AI development to prioritize generative AI advancements through its cloud computing arm, Amazon Web Services.
In response to these allegations, Amazon contested its former employees’ claims, asserting that they are inaccurately informed about the current state of Alexa’s AI initiatives. The company insists that its Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs, and affirmed its commitment to developing what it aims to be the world’s leading personal assistant.