Amazon’s efforts to monetize its Alexa-enabled devices have reportedly fallen short, leading to significant financial losses for the company, estimated at over $25 billion from 2017 to 2021. According to internal documents and sources familiar with the situation, while Amazon boasts hundreds of millions of device users, the Echo speakers are primarily utilized for basic tasks like setting alarms, rather than for shopping on the platform.
A former senior Amazon employee expressed concerns, noting, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response, Amazon CEO Andy Jassy is seeking solutions, including the launch of a paid tier for Alexa. However, some engineers working on this initiative have doubts about its potential impact.
An Amazon spokesperson emphasized that the company prioritizes the value generated from service usage over just device sales. They claimed that the Devices & Services division has successfully established various profitable ventures and is well-positioned for future success.
Additionally, Amazon’s new AI-enhanced version of Alexa, showcased in September, is reportedly not yet fully developed. Former employees have indicated that the company lacks sufficient data and necessary chips to support the advanced language model driving the new assistant. They also mentioned that Amazon has shifted its focus away from AI for Alexa to prioritize generative AI development within its Amazon Web Services cloud platform.
However, Amazon countered these claims, asserting that its former employees are misinformed about the current state of Alexa’s AI endeavors. The company stressed that its Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs, maintaining its commitment to creating “the world’s best personal assistant.”