Amazon’s efforts to monetize its Alexa-enabled devices have reportedly not been successful, with the company incurring losses exceeding $25 billion from its Echo, Kindle, and other devices between 2017 and 2021, according to the Wall Street Journal, which cited internal documents and unnamed sources. Although Amazon boasts hundreds of millions of customers for its devices, usage statistics indicate that Alexa-enabled Echo speakers are primarily utilized for setting alarms and accessing free applications rather than for making purchases on Amazon.
A former senior Amazon employee expressed concerns, 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 seeking solutions, and the company is reportedly introducing a paid version of its voice assistant. However, some engineers involved in the development of the paid Alexa are skeptical about its potential impact.
An Amazon spokesperson emphasized the company’s focus on the value created for customers through its services, rather than solely on device sales. The spokesperson highlighted that the Devices & Services division has cultivated several profitable ventures and is positioned to continue this trend.
In addition, Amazon’s newly demoed AI-powered Alexa is reportedly still in its early stages, with former employees claiming the company lacks sufficient data and access to necessary chips for the large language model that will enhance the virtual assistant. Furthermore, Amazon is said to have deprioritized the development of AI-powered Alexa in favor of advancing generative AI within its cloud computing division, Amazon Web Services.
In response to these claims, Amazon stated that the assertions from former employees are inaccurate and expressed confidence in its current Alexa AI endeavors, asserting that the Amazon Artificial General Intelligence team has access to both its own Trainium chips and Nvidia GPUs. The company’s commitment to building “the world’s best personal assistant” remains unchanged.