Amazon’s strategy to monetize its Alexa-enabled devices has reportedly faltered, leading to losses of over $25 billion from 2017 to 2021. Internal documents and sources familiar with the situation, as outlined by the Wall Street Journal, reveal that despite having hundreds of millions of customers using devices like Echo and Kindle, these Alexa-enabled speakers are primarily utilized for setting alarms and employing free apps rather than for purchases on Amazon.
A former senior Amazon employee expressed concern about the company’s investment in hiring thousands for what appears to be a basic smart timer capability. In response to the mounting losses, Amazon’s CEO Andy Jassy is seeking solutions, including the introduction of a paid version of its voice assistant. However, some engineers are skeptical about whether this upgrade will have a significant impact.
An Amazon spokesperson stated that the company prioritizes the value created for customers using its services over merely selling devices. They emphasized that the Devices & Services division has successfully established several profitable ventures for Amazon and is poised to continue this trend.
In addition, Amazon’s new AI-powered Alexa, which was showcased in September, is reportedly still in its developmental stages, lacking sufficient data and the necessary chips to support the advanced language model needed. According to sources, the company has shifted its focus towards developing generative AI for its cloud computing division, Amazon Web Services.
Amazon contests the claims of its former employees, asserting that their insights on its AI initiatives are incorrect. The company maintains that the Amazon Artificial General Intelligence team has access to required technologies, including both proprietary Trainium chips and Nvidia GPUs, and asserts its commitment to developing the world’s leading personal assistant.