Amazon’s efforts to monetize its Alexa-enabled devices are reportedly falling short, leading to significant financial losses for the company. According to internal documents reviewed by the Wall Street Journal, Amazon incurred losses exceeding $25 billion from products such as Echo and Kindle between 2017 and 2021. Although the company has achieved a substantial customer base for its devices, the primary functions of the Echo speakers revolve around basic tasks like setting alarms, rather than facilitating shopping on Amazon.
A former senior employee expressed concerns about the inefficient use of resources, remarking, “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 exploring solutions, including the introduction of a paid version of its voice assistant. However, internal sources have indicated that some engineers doubt its potential impact.
An Amazon representative stated, “We are focused on the value we create when customers use our services, not just when they buy our devices,” highlighting that the Devices & Services division has established several profitable ventures and is well-positioned for future success.
In addition, Amazon’s new AI-enhanced Alexa, which was showcased in September, is reportedly far from readiness. Former employees claim that the company lacks sufficient data and access to the necessary chips to support the advanced language model for the updated assistant. Furthermore, it seems Amazon has shifted its priorities to concentrate on generative AI development for its cloud computing arm, Amazon Web Services.
In response to these claims, Amazon asserted that its former employees are mistaken regarding the Alexa AI project, and affirmed that the Amazon Artificial General Intelligence team has access to necessary resources, including in-house chips and Nvidia GPUs. The company remains committed to its goal of creating the world’s best personal assistant.