Amazon’s strategy to monetize its Alexa-enabled devices appears to be falling short, as the company has reportedly incurred losses exceeding $25 billion from its Echo, Kindle, and other devices between 2017 and 2021. According to a report by the Wall Street Journal, internal documents and sources indicate that despite having hundreds of millions of users, Amazon’s Echo speakers are primarily utilized for basic functions like setting alarms rather than for shopping.
A former senior Amazon employee expressed concerns about the effectiveness of the investments made, suggesting that the company’s recent hiring of 10,000 employees has resulted in limited advancements. In response, Amazon’s CEO Andy Jassy is reportedly exploring solutions, including the launch of a paid subscription for its voice assistant, although there are doubts among engineers regarding the potential impact of this change.
An Amazon spokesperson emphasized that the company prioritizes the overall value created for customers using its services, rather than focusing solely on device sales. The spokesperson highlighted the success of Amazon’s Devices & Services organization in establishing profitable ventures.
Additionally, Amazon’s upcoming AI-enhanced version of Alexa has been described as still under development, with former employees stating that the company lacks sufficient data and the necessary technology to utilize the large language model for the new assistant. In light of these challenges, Amazon has shifted its focus towards generative AI for its cloud computing division, Amazon Web Services.
In response to the claims made by former employees, Amazon asserts that they are misinformed about the current status of its Alexa AI projects and confirmed that their Artificial General Intelligence team has access to the necessary chips for development. The company’s commitment remains to create the best personal assistant in the world.