Amazon’s venture into monetizing its Alexa-enabled devices is seemingly failing, leading to substantial financial losses for the company. Reports indicate that from 2017 to 2021, Amazon lost more than $25 billion due to its Echo, Kindle, and other devices, as per internal documents and sources consulted by the Wall Street Journal. Although Amazon has a vast customer base for its devices, its Echo speakers equipped with Alexa are primarily used for simple tasks like setting alarms rather than for shopping purposes.
A former senior Amazon employee expressed concern about the significant workforce hired with the intention of enhancing these technologies, remarking, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to this challenge, Amazon CEO Andy Jassy is seeking solutions, including the introduction of a paid version of the voice assistant. Nevertheless, some engineers involved in this new initiative have expressed skepticism about its potential impact.
An Amazon spokesperson emphasized the company’s focus on the value delivered through its services rather than solely on device sales, asserting that their Devices & Services organization has established many profitable ventures and is well-positioned for future success.
In addition, Amazon’s newly introduced AI-powered Alexa, showcased in September, is reportedly far from completion. Former employees have noted that the company lacks adequate data and the necessary chips to support the large language model driving this enhanced version of the assistant. Furthermore, it seems Amazon has shifted its priorities to focus on developing generative AI for its cloud computing sector, Amazon Web Services.
In response to criticism, Amazon has countered that former employees are mistaken or misinformed about its current AI efforts, claiming that the Amazon Artificial General Intelligence team has access to both Trainium chips and Nvidia graphics processing units. The goal for Alexa, according to the company, remains unchanged: to create the world’s leading personal assistant.