Amazon’s initiative to monetize its Alexa-enabled devices has reportedly resulted in significant financial losses, amounting to over $25 billion from 2017 to 2021 based on internal documents and insider sources, as reported by the Wall Street Journal. Despite boasting hundreds of millions of customers, the Echo speakers are primarily utilized for basic functionalities such as setting alarms rather than driving shopping activities on Amazon.
A former senior Amazon employee expressed concern about the effectiveness of the initiative, 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 subscription model for Alexa. However, engineers involved in this development reportedly express skepticism about its potential impact.
An Amazon spokesperson emphasized the company’s focus on delivering value to customers beyond just device sales, highlighting the profitability of its Devices & Services organization and its future prospects.
In addition, Amazon showcased its new AI-powered version of Alexa in September, but former employees have indicated that it is far from ready for release. They noted that the company lacks sufficient data and access to the necessary chips for the large language model that will support the upgraded virtual assistant. Furthermore, Amazon has reportedly shifted its focus toward developing generative AI for its cloud computing platform, Amazon Web Services.
Amazon countered that the claims from former employees are inaccurate, asserting that its Artificial General Intelligence team has access to the required in-house Trainium chips and Nvidia GPUs. The company reiterated its goal to build “the world’s best personal assistant” with Alexa.