Amazon’s attempts to monetize its Alexa-enabled devices have reportedly not been successful, resulting in losses exceeding $25 billion between 2017 and 2021. The Wall Street Journal, referencing internal documents and sources familiar with the situation, revealed that despite having hundreds of millions of customers, the Echo speakers are primarily used for basic tasks like setting alarms rather than for shopping purposes.
Concerns have been raised within the company, with a former senior Amazon employee stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these challenges, CEO Andy Jassy is seeking solutions, including the introduction of a paid version of Alexa. However, there are doubts among engineers about the potential effectiveness of this new tier.
An Amazon spokesperson defended the company’s approach, emphasizing a focus on creating value through its services beyond just device sales. They stated, “Our Devices & Services organization has established numerous profitable businesses for Amazon and is well-positioned to continue doing so going forward.”
Additionally, reports indicate that the new AI-powered version of Alexa, showcased in September, is still not ready for launch. Former employees noted that the company lacks sufficient data and access to the necessary chips for the advanced language model intended for the new assistant. Furthermore, Amazon has reportedly shifted its focus toward developing generative AI for its cloud service platform, Amazon Web Services.
In response to these critiques, Amazon contended that the insights from former employees were inaccurate, asserting that its Artificial General Intelligence team has the resources required, including in-house chips and Nvidia GPUs, to enhance Alexa. The company’s ongoing ambition remains to create the leading personal assistant in the market.