Amazon’s efforts to monetize its Alexa-enabled devices have reportedly resulted in significant financial losses, totaling over $25 billion between 2017 and 2021, according to a report from the Wall Street Journal. Internal documents and sources familiar with the situation indicate that while Amazon has attracted hundreds of millions of customers, many users primarily utilize their Echo speakers for free features like alarm settings, rather than for shopping.
A former senior Amazon employee expressed concerns, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In light of these challenges, CEO Andy Jassy is seeking solutions, including the introduction of a paid version of Alexa. However, some engineers have voiced skepticism regarding the paid model’s potential for success.
An Amazon spokesperson emphasized the company’s commitment to providing value beyond device purchases, noting that their Devices & Services division has generated profitable ventures and is positioned for continued success.
In addition, Amazon’s new AI-enhanced Alexa, showcased in September, is reportedly far from completion. Former employees claim the company lacks adequate data and necessary chips for the advanced language model that powers the upgraded assistant. There are reports that Amazon is prioritizing generative AI development for its cloud service, Amazon Web Services, instead of focusing on AI capabilities for Alexa.
In response to these claims, Amazon maintains that the information from former employees is inaccurate, asserting that its Artificial General Intelligence team has access to both its proprietary Trainium chips and Nvidia GPUs. The company insists that its goal remains to create the world’s leading personal assistant.