Amazon’s strategy to monetize its Alexa-enabled devices has seemingly failed, resulting in substantial losses for the company. Reports indicate that Amazon lost over $25 billion from its Echo, Kindle, and similar devices between 2017 and 2021, based on internal documents and interviews with anonymous sources.
Despite having hundreds of millions of customers, the Echo speakers are primarily utilized for basic functions like setting alarms rather than shopping on Amazon. One former Amazon employee expressed concern about the company’s investment, 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 seeking solutions, with the company reportedly set to introduce a paid option for its voice assistant. However, some engineers working on this version of Alexa have reservations about its potential impact.
An Amazon spokesperson emphasized that the focus is on the value provided to customers through its services, indicating that the Devices & Services division has established several profitable ventures and is positioned for future success.
Meanwhile, Amazon’s new AI-powered Alexa, which was showcased last month, reportedly lacks readiness due to insufficient data and limited access to necessary hardware. The company is said to have shifted focus towards developing generative AI for its Amazon Web Services division, deprioritizing the new Alexa.
Amazon has countered these claims, asserting that its former employees are misinformed regarding the current state of its Alexa AI initiatives. The company maintains that its Artificial General Intelligence team has access to essential technology and that its goal remains to create the world’s premier personal assistant.