Amazon’s venture into monetizing its Alexa-enabled devices has not yielded the anticipated returns, reportedly costing the company billions. From 2017 to 2021, Amazon recorded losses exceeding $25 billion from its Echo, Kindle, and other related devices, as revealed by internal documents referenced by the Wall Street Journal.
Despite boasting hundreds of millions of customers for these devices, many users primarily utilize the Alexa-enabled Echo speakers for basic functions such as setting alarms rather than shopping on Amazon. A former senior Amazon employee expressed concerns about the company’s strategy, noting the significant investment in hiring staff without seeing corresponding returns.
In response to these challenges, Amazon CEO Andy Jassy is seeking solutions, including the introduction of a paid version of Alexa. Nonetheless, some engineers involved in this initiative have reservations about its potential effectiveness.
An Amazon representative stated that the company prioritizes the value provided to customers through its services and has established various profitable ventures within its Devices & Services division.
On another note, advancements in Amazon’s AI-powered Alexa, demonstrated in September, are reportedly behind schedule. Former employees indicated that the company lacks sufficient data and access to necessary chips for the advanced language model that supports the new version of Alexa. Furthermore, Amazon has shifted its focus toward developing generative AI for its cloud service, Amazon Web Services, rather than prioritizing the new Alexa features.
In defense of its progress, Amazon contended that the perspectives of former employees do not accurately reflect the company’s current AI initiatives. The company affirmed that its Artificial General Intelligence team has access to the required hardware to support its plans for Alexa, aiming to establish it as the leading personal assistant in the market.