Amazon’s efforts to monetize its Alexa-enabled devices have reportedly been unsuccessful, leading to significant financial losses for the company. Between 2017 and 2021, Amazon lost over $25 billion on its Echo, Kindle, and other devices, according to the Wall Street Journal, which referenced internal documents and sources familiar with the situation. Although Amazon has amassed hundreds of millions of customers for its devices, the research indicated that users primarily utilize Echo speakers for basic tasks, such as setting alarms, rather than for shopping.
A former senior employee expressed concern, noting, “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 reportedly seeking solutions, including the introduction of a paid version of the voice assistant. However, some engineers involved in this project have reportedly expressed skepticism about its potential effectiveness.
An Amazon spokesperson stated, “We’re focused on the value we create when customers use our services, not just when they buy our devices,” emphasizing that the Devices & Services unit has successfully launched several profitable ventures for the company and is poised for future success.
In a related development, the new AI-driven version of Alexa, which Amazon showcased in September, is said to be far from ready, according to former employees. They claim that the company lacks sufficient data and access to the necessary hardware, specifically the chips required for the large language model that supports the upgraded assistant. Furthermore, there are reports that Amazon has shifted its priorities towards developing generative AI for its Amazon Web Services cloud division.
Amazon refuted the comments from its former employees, contending that they are misguided about the current initiatives surrounding Alexa AI. The company affirmed that its Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs, maintaining its commitment to developing the best personal assistant in the market.