Amazon’s efforts to monetize its Alexa-enabled devices have yielded significant financial losses, with reports indicating the company lost over $25 billion from its Echo, Kindle, and other products between 2017 and 2021, according to the Wall Street Journal. Despite having hundreds of millions of customers using these devices, it appears that the majority utilize them for setting alarms and accessing free applications rather than making purchases on Amazon.
A former senior employee expressed concerns about the company’s strategy, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to these challenges, Amazon’s CEO Andy Jassy is exploring solutions, including the introduction of a paid version of Alexa. However, some engineers involved in the project have voiced doubts about its potential effectiveness, according to the Wall Street Journal.
An Amazon spokesperson defended the company’s direction, emphasizing that they prioritize the value generated from customer engagement with their services, not solely from device sales. They highlighted that Amazon’s Devices & Services division has launched several profitable ventures and remains optimistic about future success.
Additionally, reports indicate that Amazon’s newly introduced AI-powered Alexa, showcased in September, is still far from ready. Former employees suggest that the company lacks sufficient data and necessary technology, impeding progress on the large language model vital for the new assistant. Furthermore, Amazon has reportedly shifted focus away from the AI-driven Alexa to prioritize generative AI for its cloud service, Amazon Web Services.
In response to criticism from former employees, Amazon denied the assertions, claiming that the Amazon Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs. The company maintains its objective to develop the world’s premier personal assistant.