Amazon’s efforts to monetize its Alexa-enabled devices have reportedly resulted in significant financial losses, amounting to over $25 billion from 2017 to 2021, according to internal documents and insights from sources familiar with the situation. Despite having hundreds of millions of customers using its devices, the Alexa-enabled Echo speakers are primarily utilized for simple tasks like setting alarms rather than facilitating shopping.
A former senior employee expressed concerns about the focus of Amazon’s hiring and development efforts, remarking, “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 exploring solutions, including the introduction of a paid tier for its voice assistant. However, there are doubts among engineers about the potential success of this new feature.
An Amazon representative asserted that the company prioritizes the value generated from its services beyond just device sales. They emphasized that the Devices & Services division has successfully established various profitable ventures and is poised to continue this trend.
In a related note, Amazon’s new AI-driven version of Alexa, showcased in September, is facing readiness issues, according to former employees. Reports indicate that the company lacks sufficient data and the necessary chip access to support the new large language model. Moreover, Amazon is allegedly shifting its focus towards advancing generative AI for its cloud computing service, Amazon Web Services.
Amazon has refuted claims made by former employees, stating they are misinformed regarding the current state of its AI initiatives. The company insists that its Artificial General Intelligence team has access to both its proprietary Trainium chips and Nvidia GPUs, maintaining that the goal for Alexa remains to create the world’s best personal assistant.