Amazon’s attempts to monetize its Alexa-enabled devices have not yielded the expected results and have reportedly cost the company over $25 billion between 2017 and 2021. According to the Wall Street Journal, citing internal documents and anonymous sources, the tech giant has faced significant losses linked to its Echo, Kindle, and various other devices.
Despite attracting hundreds of millions of customers to its Alexa-enabled devices, a significant portion of usage seems to revolve around basic functionalities like setting alarms, rather than driving purchases through Amazon’s platform. Former senior employees expressed concern, 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 exploring solutions, including the introduction of a paid version of the Alexa service. However, some engineers involved in developing this tier are skeptical about its potential impact, according to the Wall Street Journal.
An Amazon spokesperson emphasized the company’s focus on providing value through its services beyond device sales. They noted that the Devices & Services division has created profitable ventures and is well-equipped for future growth.
Furthermore, Amazon’s latest AI-enhanced version of Alexa, unveiled in September, is reportedly not fully developed. Former employees highlighted issues related to insufficient data and the lack of access to necessary chips for the advanced language model underpinning the new assistant, as reported by Fortune. The company has shifted its priority towards enhancing generative AI for its cloud services, Amazon Web Services.
In response to these claims, Amazon asserted that the former employees’ assessments were inaccurate and that the Amazon Artificial General Intelligence team has adequate access to both its proprietary Trainium chips and Nvidia GPUs. The company reaffirmed its commitment to developing the world’s leading personal assistant with Alexa.