Amazon’s initiative to monetize its Alexa-enabled devices has reportedly been a failure, resulting in significant financial losses for the company.
According to internal documents and sources cited by the Wall Street Journal, Amazon has lost over $25 billion on its Echo, Kindle, and other devices between 2017 and 2021. Despite attracting hundreds of millions of customers, users predominantly utilize the Alexa-enabled Echo speakers for simple tasks like setting alarms rather than for making purchases 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, Amazon CEO Andy Jassy is seeking solutions, including the launch of a paid version of the voice assistant. However, some engineers involved in the project are skeptical about its potential efficacy, according to the Wall Street Journal.
An Amazon spokesperson remarked, “We’re focused on the value we create when customers use our services, not just when they buy our devices,” adding that the Devices & Services division has successfully established profitable ventures for the company and is poised to continue this trend.
On another note, Amazon’s new AI-enhanced Alexa, which was showcased in September, is reportedly far from completion, as former employees have indicated that the company lacks sufficient data and access to the necessary technology for the large language model driving the new virtual assistant. Furthermore, it seems that Amazon has shifted its focus toward developing generative AI for its cloud computing service, Amazon Web Services, at the expense of the AI-powered Alexa.
In response to this criticism, Amazon has asserted that its former employees are misguided regarding its Alexa AI initiatives and confirmed that the team has access to both its in-house Trainium chips and Nvidia GPUs. The company maintains that its aim remains to develop the world’s best personal assistant.