Amazon’s efforts to monetize its Alexa-enabled devices have not yielded expected results, leading to substantial financial losses for the company. Reports indicate that from 2017 to 2021, Amazon lost over $25 billion on devices such as Echo and Kindle, according to internal documents and sources close to the matter.
Despite having hundreds of millions of customers for its devices, many users primarily utilize Alexa for basic functions like setting alarms rather than for shopping on Amazon. One former senior employee expressed concern over the company’s investments, noting, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to the challenges, Amazon’s CEO Andy Jassy is reportedly considering introducing a paid version of the Alexa voice assistant. However, some engineers working on this initiative doubt its effectiveness in generating revenue.
An Amazon spokesperson emphasized the company’s commitment to creating value beyond device sales, stating that the Devices & Services organization has established multiple profitable ventures and remains well-positioned for future success.
In addition, Amazon’s AI-powered version of Alexa, which was showcased in September, is reportedly far from completion, with former employees highlighting issues around data availability and the necessary hardware. The company is reportedly shifting focus toward generative AI for its cloud services rather than advancing the new Alexa project.
Amazon contended that the assessments by former employees are unfounded, asserting that its Artificial General Intelligence team has access to essential resources needed for their AI initiatives. The firm reaffirmed its goal of developing “the world’s best personal assistant.”