Amazon’s strategy to monetize its Alexa-enabled devices has reportedly fallen short, resulting in significant financial losses for the company. According to a report from the Wall Street Journal, internal documents and sources indicate 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 its devices, the Alexa-enabled Echo speakers are primarily utilized for basic functions like setting alarms and running free apps, rather than facilitating purchases on Amazon.
A former senior employee expressed doubts about the company’s strategy, noting, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these challenges, Amazon CEO Andy Jassy is seeking solutions and is set to introduce a paid version of its voice assistant. However, some engineers working on this project reportedly doubt its potential to succeed.
An Amazon spokesperson stated, “We are focused on the value we create when customers use our services, not just when they buy our devices.” The spokesperson also highlighted that Amazon’s Devices & Services organization has established several profitable ventures and is poised for future success.
In addition, Amazon introduced a new AI-powered version of Alexa in September, but former employees claim it is not yet ready for deployment. They have suggested that the company lacks sufficient data and the necessary technological resources to support the advanced large language model driving the enhanced assistant. It appears that Amazon has shifted its focus toward generative AI for its cloud platform, Amazon Web Services, rather than prioritizing the new Alexa initiative.
Amazon has countered these claims, stating that its former employees are misinformed about its current AI efforts. The company asserts that its Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs, reaffirming its commitment to creating “the world’s best personal assistant.”