Amazon’s strategy to monetize its Alexa-enabled devices has reportedly failed, resulting in significant financial losses for the company, estimated at over $25 billion from 2017 to 2021. This information comes from internal documents and sources cited by the Wall Street Journal. Although Amazon has hundreds of millions of customers for its devices, the usage of Alexa-enabled Echo speakers tends to lean more towards setting alarms and utilizing free applications rather than facilitating purchases on Amazon.
A former senior employee expressed concerns about the effectiveness of Amazon’s efforts, 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 seeking solutions, including the introduction of a paid version of the voice assistant. However, some engineers working on this initiative are skeptical about its potential impact.
An Amazon spokesperson stated that the company is concentrating on the value generated from customer interactions with its services rather than solely from device sales. They emphasized that the Devices & Services division has successfully created several profitable businesses and is positioned for continued success.
Additionally, Amazon’s new AI-powered version of Alexa, showcased in September, is reportedly far from completion, according to former employees. The company is believed to lack sufficient data and access to the necessary chips for operating the advanced language model that powers the upgraded assistant. Furthermore, Amazon has allegedly shifted its focus towards developing generative AI for its cloud computing division, Amazon Web Services.
In response, Amazon has dismissed claims from its former employees as incorrect, asserting that their Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs, and reiterated its commitment to creating the “world’s best personal assistant.”