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. This information comes from internal documents and sources familiar with the situation, as reported by the Wall Street Journal. While Amazon has attracted hundreds of millions of customers to its range of devices, it appears that many users utilize the Alexa-enabled Echo speakers mainly for basic functions like setting alarms, rather than shopping on the platform.
A former senior employee expressed concerns, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to the situation, Amazon CEO Andy Jassy is seeking solutions, including the introduction of a paid version of its voice assistant. However, some engineers doubt that this new initiative will significantly alter the current trajectory.
An Amazon spokesperson asserted that the company prioritizes the value it creates through its services rather than simply through device sales. “Our Devices & Services organization has established numerous profitable businesses for Amazon and is well-positioned to continue doing so going forward,” the spokesperson stated.
Additionally, challenges have arisen concerning the development of Amazon’s new AI-powered Alexa, which was showcased in September. According to former employees, the project is not yet ready due to insufficient data and limited access to the necessary chips for running the large language model. Amazon is reportedly prioritizing generative AI development for its cloud services unit, Amazon Web Services, over the new Alexa.
In response to criticisms from former employees, Amazon emphasized that its Artificial General Intelligence team has access to in-house Trainium chips and Nvidia GPUs. The company maintains its commitment to creating “the world’s best personal assistant.”