Amazon’s efforts to monetize its Alexa-enabled devices have reportedly resulted in significant financial losses, totaling over $25 billion between 2017 and 2021. According to the Wall Street Journal, which referenced internal documents and anonymous sources, while the online retail giant has attracted hundreds of millions of customers with its devices, the primary usage of Alexa-enabled Echo speakers has been for basic functions like setting alarms, rather than for shopping on Amazon.
A former senior Amazon employee expressed concerns about the company’s direction, stating, “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 reportedly exploring alternative strategies, including the introduction of a paid version of Alexa. However, some engineers within the company remain skeptical about the potential impact of this change.
An Amazon spokesperson emphasized that the company is concentrating on the value created through its services, stating, “Our Devices & Services organization has established numerous profitable businesses for Amazon and is well-positioned to continue doing so going forward.”
In addition to these developments, Amazon’s new AI-powered version of Alexa, which was showcased in September, reportedly still requires significant advancements before it is ready for launch. According to former employees, the necessary data and technology, including chips essential for operating the large language model that supports the new assistant, have not been fully developed. The company has also shifted its priorities to focus on generative AI for its cloud service division, Amazon Web Services.
Amazon has contested claims made by former employees, stating they are incorrect and misinformed regarding its current AI initiatives. The company assures that its Amazon Artificial General Intelligence team has access to the required technology, including proprietary Trainium chips and Nvidia GPUs, and remains committed to creating “the world’s best personal assistant.”