Amazon’s strategy to monetize its Alexa-enabled devices has reportedly resulted in significant financial losses, totaling over $25 billion from 2017 to 2021. According to the Wall Street Journal, internal documents and sources familiar with the situation indicate that, despite having hundreds of millions of users, the Echo speakers are primarily utilized for basic functions such as setting alarms, rather than facilitating shopping on Amazon.
A former Amazon executive expressed concerns about the company’s hiring practices and outcomes, noting that substantial investments were made to develop devices that may not meet consumer expectations. In light of these challenges, Amazon CEO Andy Jassy is exploring solutions, including the launch of a paid version of Alexa. However, some engineers are skeptical about the potential success of such a model.
An Amazon representative stated that the company prioritizes the value generated for customers through its services and has successfully established several profitable ventures within its Devices & Services division. The spokesperson emphasized the organization’s potential to continue this trend in the future.
In addition, Amazon’s new AI-driven version of Alexa, showcased in September, is reportedly still in development and facing challenges. Former employees indicated that the company lacks sufficient data and the necessary technology to support its advanced features. Furthermore, Amazon is said to have shifted its focus towards generative AI for its cloud service, Amazon Web Services, potentially sidelining the development of the AI-enhanced Alexa.
In response, Amazon refuted claims from former employees, asserting that its AI initiatives are on track and that its Artificial General Intelligence team has access to both proprietary chips and Nvidia GPUs. The company reiterated its commitment to creating what it aims to be the best personal assistant in the market.