Amazon’s strategy to monetize its Alexa-enabled devices has reportedly fallen short, resulting in substantial financial losses, estimated at over $25 billion between 2017 and 2021. This information comes from the Wall Street Journal, which cites internal documents and sources familiar with the situation. Despite having hundreds of millions of customers using devices like the Echo and Kindle, the primary functions of these Alexa-enabled speakers include setting alarms and utilizing various free applications, rather than facilitating purchases on Amazon.
A former senior Amazon employee expressed concerns about the focus on developing features like a smart timer instead of effectively monetizing the technology. As a response, Amazon CEO Andy Jassy is seeking solutions, including the introduction of a paid tier for Alexa. However, some engineers are reportedly skeptical about whether this approach will yield significant results.
An Amazon spokesperson emphasized the company’s commitment to creating value beyond just device sales, noting that the Devices & Services division has been successful in building profitable business ventures.
In addition, Amazon’s new AI-integrated Alexa, which was showcased in September, is said to be far from ready, according to former employees. The company reportedly lacks sufficient data and access to the necessary chips for the advanced large language model that powers the new assistant. Moreover, resources have shifted towards developing generative AI for Amazon Web Services, leaving the AI-enabled Alexa project deprioritized.
Amazon countered these claims, asserting that former employees are misinformed. The company stated that its Artificial General Intelligence team has access to both its proprietary Trainium chips and Nvidia GPUs, and reaffirmed its commitment to creating the best personal assistant in the market.