Amazon’s strategy to monetize its Alexa-enabled devices has not been successful, resulting in substantial financial losses for the company, which reportedly amounts to over $25 billion from 2017 to 2021. This information is based on internal documents and insights from unnamed sources, as reported by the Wall Street Journal. Despite having hundreds of millions of users, the Echo speakers equipped with Alexa are primarily utilized for basic tasks like setting alarms rather than for shopping, which was a key expectation.
A former senior Amazon employee expressed concerns about the company’s hiring practices, indicating that despite bringing on 10,000 new employees, the outcome has been minimal, likening it to the development of a “smart timer.”
In response to these challenges, Amazon CEO Andy Jassy is reportedly seeking solutions, including the introduction of a paid version of Alexa. However, there are doubts among engineers about the potential impact of this new offering.
An Amazon spokesperson commented that the company is focused on the value created when customers use its services rather than solely on device sales, emphasizing that their Devices & Services division has established several profitable businesses and is positioned for future growth.
Additionally, concerns have been raised regarding the development of Amazon’s new artificial intelligence-enhanced Alexa, which was previewed in September. Former employees suggest that the project is far from completion due to insufficient data and access to necessary technology. Furthermore, it appears Amazon has shifted focus away from AI development for Alexa to prioritize generative AI projects within its Amazon Web Services division.
Amazon has rebutted claims made by former employees, asserting that they have the required technology, including their proprietary Trainium chips and Nvidia GPUs, to support their AI initiatives. The company’s objective remains clear: to develop the world’s leading personal assistant.