Amazon’s venture into monetizing its Alexa-enabled devices has reportedly not yielded the desired results, with the company facing substantial losses amounting to over $25 billion from its Echo, Kindle, and other devices between 2017 and 2021, according to internal documents and sources cited by the Wall Street Journal. Despite having hundreds of millions of customers using these devices, it appears that Alexa-enabled Echo speakers are primarily utilized for setting alarms and accessing free applications rather than facilitating purchases on Amazon.
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 these challenges, Amazon CEO Andy Jassy is seeking solutions, including the introduction of a paid version of its voice assistant. However, some engineers involved in developing this version have doubts about its potential impact.
An Amazon spokesperson emphasized the company’s focus on the value provided to customers when utilizing its services, rather than solely on device sales. The spokesperson pointed out that the Devices & Services division has successfully established various profitable businesses.
In parallel, Amazon’s newly demonstrated artificial intelligence-powered Alexa, showcased in September, is reportedly far from being ready, according to former staff. The company allegedly lacks sufficient data and access to the required chips to support the large language model for the latest version of its virtual assistant. Additionally, Amazon has reportedly shifted its priorities toward developing generative AI for its cloud computing division, Amazon Web Services.
Amazon has responded to these allegations, stating that the criticisms from former employees are incorrect and that the Amazon Artificial General Intelligence team has access to necessary resources, including in-house Trainium chips and Nvidia GPUs. The company insists that its vision for Alexa remains steadfast: to create the world’s best personal assistant.