Amazon’s strategy to monetize its Alexa-enabled devices has not yielded the expected results, leading to substantial financial losses for the company. According to internal documents and sources familiar with the situation, the online retail giant lost over $25 billion from its Echo, Kindle, and other devices between 2017 and 2021. Despite having hundreds of millions of customers, the Alexa-enabled Echo speakers are primarily used for basic functions such as setting alarms, rather than for shopping on Amazon.
A former senior Amazon employee expressed concerns, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these challenges, CEO Andy Jassy is reportedly working on introducing a paid version of Alexa. However, some engineers involved in this project are skeptical about its potential impact.
An Amazon spokesperson emphasized that the company is focused on creating value for customers using its services rather than merely selling devices. They highlighted that the Devices & Services division has established several profitable ventures and is positioned for future success.
Additionally, regarding the new AI-powered version of Alexa showcased in September, former employees have indicated that it is not ready for launch. They claim the company lacks sufficient data and the necessary chips to run the large language model that supports the new virtual assistant. Reports suggest that Amazon has shifted its focus toward developing generative AI for its cloud computing sector, Amazon Web Services.
In response, Amazon has disputed the claims made by former employees, asserting that they are misinformed about current efforts related to Alexa AI. The company stated that its Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs, reiterating its commitment to building the world’s best personal assistant.