Amazon’s strategy for monetizing its Alexa-enabled devices has reportedly fallen short, resulting in substantial financial losses for the company. Internal documents reveal that from 2017 to 2021, Amazon lost over $25 billion due to investments in its Echo, Kindle, and other devices.
Despite having hundreds of millions of users, the majority utilize Echo speakers for basic functions such as setting alarms, rather than for shopping on Amazon. A former senior Amazon employee commented on the situation, expressing concerns about the company’s hiring practices and the perceived lack of effective innovation.
In response to these challenges, Amazon CEO Andy Jassy is exploring solutions, including the launch of a paid version of its voice assistant. However, reports suggest that some engineers doubt the impact this could have on the overall economic situation.
In a statement, an Amazon spokesperson emphasized the company’s focus on creating value through user engagement, rather than solely device sales. The spokesperson claimed that the Devices & Services division has successfully established several profitable ventures.
Additionally, the development of an AI-driven version of Alexa, showcased in September, is reportedly not on track. Former employees indicated that Amazon lacks sufficient data and access to the necessary hardware to support the advanced capabilities of this new virtual assistant. The company has allegedly shifted priorities to develop generative AI for its Amazon Web Services division instead.
Amazon refuted claims from former employees, asserting that the Amazon Artificial General Intelligence team has access to critical resources such as in-house chips and Nvidia GPUs, and reiterated its commitment to creating the best personal assistant in the market.