Amazon’s efforts to monetize its Alexa-enabled devices have reportedly resulted in significant financial losses, with estimates exceeding $25 billion from 2017 to 2021, according to internal documents and sources familiar with the situation. Despite boasting hundreds of millions of customers, the Echo speakers are primarily utilized for basic functions, such as setting alarms and using free applications, rather than driving purchases on Amazon.
A former senior employee expressed concerns over Amazon’s expenditures, highlighting the issue of hiring thousands while only achieving minimal functionality, such as a “smart timer.”
In response to these challenges, Amazon CEO Andy Jassy is searching for solutions, which includes the launch of a paid version of Alexa. However, some engineers are skeptical that this move will lead to significant improvements.
An Amazon spokesperson emphasized the company’s focus on customer value and pointed to the establishment of profitable ventures within its Devices & Services organization.
On a different note, Amazon’s latest AI-powered Alexa, unveiled in September, is reportedly not ready for deployment. Former employees have indicated that the company lacks sufficient data and the necessary chips to support the new large language model. Additionally, Amazon is prioritizing generative AI developments within its cloud computing sector, Amazon Web Services, over the new Alexa version.
In response to these claims, Amazon asserted that its former employees are misinformed about the company’s AI initiatives and confirmed that its Artificial General Intelligence team has access to the required Trainium chips and Nvidia GPUs, maintaining that the goal for Alexa remains to build the “world’s best personal assistant.”