Amazon’s ambitious strategy to monetize its Alexa-enabled devices has reportedly fallen flat, resulting in significant financial losses for the company. According to a recent report from the Wall Street Journal, internal documents reveal that Amazon lost over $25 billion from its Echo, Kindle, and other devices between 2017 and 2021. Despite having hundreds of millions of customers using these devices, the Echo speakers are primarily utilized for basic functions like setting alarms rather than shopping on Amazon.
A former senior Amazon employee expressed concerns, saying, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In light of these challenges, CEO Andy Jassy is seeking solutions and is expected to introduce a paid version of the voice assistant. However, reports suggest that some engineers involved in this initiative are skeptical about its impact.
An Amazon spokesperson emphasized the company’s commitment to creating value through its services beyond just device sales, stating, “Our Devices & Services organization has established numerous profitable businesses for Amazon and is well-positioned to continue doing so going forward.”
Additionally, concerns have emerged regarding the readiness of Amazon’s new AI-powered Alexa, which was showcased in September. Former employees have indicated that the company lacks sufficient data and access to the necessary chips to support the new large language model. Furthermore, reports indicate that Amazon has shifted its focus toward generative AI development for its cloud computing division, Amazon Web Services.
In response to the criticisms, Amazon asserted that claims from former employees regarding its Alexa AI initiatives are inaccurate, stating that its Artificial General Intelligence team has access to the required in-house Trainium chips and Nvidia GPUs. The company reaffirmed its intention to create “the world’s best personal assistant.”