Amazon’s strategy to monetize its Alexa-enabled devices has reportedly fallen short, resulting in significant financial losses for the company, amounting to over $25 billion from 2017 to 2021, according to the Wall Street Journal. This information comes from internal documents and sources familiar with the situation.
Although the tech giant has amassed hundreds of millions of customers for its devices, its Echo speakers are reportedly utilized more for basic functions like setting alarms rather than for making purchases on Amazon. A former senior employee reflected on this, expressing concerns over the workforce increases and the overall utility of the devices.
In response to these challenges, CEO Andy Jassy is reportedly exploring solutions, including the introduction of a paid version of the Alexa voice assistant. However, some engineers involved in the project are skeptical about its potential to drive significant revenue.
An Amazon spokesperson emphasized the company’s commitment to delivering value beyond just device sales, highlighting the profitability of various sectors within the Devices & Services organization.
In addition, the company recently showcased a new AI-enhanced version of Alexa, though former employees indicated it is still not prepared for release. They noted a lack of sufficient data and necessary hardware to support the advanced language model that would power this iteration. Amazon is also said to have shifted its focus towards generative AI developments for its cloud computing division, Amazon Web Services.
In response to the criticisms, Amazon challenged the accuracy of claims made by former employees concerning its AI initiatives, asserting that its Artificial General Intelligence team has access to essential resources for development. The company’s overarching goal remains to create the best personal assistant available.