Amazon’s efforts to monetize its Alexa-enabled devices have reportedly fallen short, resulting in significant financial losses for the company. According to internal documents and sources familiar with the situation, Amazon lost over $25 billion from its Echo, Kindle, and other devices from 2017 to 2021. Despite the presence of hundreds of millions of customers using these devices, the Alexa-enabled Echo speakers are primarily utilized for basic functions like setting alarms, rather than driving sales on Amazon.
A former senior employee expressed concern about the situation, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In light of these challenges, Amazon CEO Andy Jassy is seeking solutions and is reportedly introducing a subscription-based version of its voice assistant. However, some engineers involved in developing this paid version are skeptical about its potential to change the current dynamics.
An Amazon spokesperson emphasized that the company aims to create value through its services beyond just device sales. They noted that the Devices & Services organization has established several profitable ventures and is poised to continue this trend.
In addition, the rollout of Amazon’s new AI-powered Alexa, which was showcased in September, appears to be behind schedule. Former employees have suggested the company lacks the necessary data and access to the appropriate chips to support the large language model driving this new version of the assistant. Reports indicate that Amazon has shifted its focus towards enhancing generative AI capabilities within its cloud computing division, Amazon Web Services.
Amazon has dismissed claims from former employees, asserting that their perspectives are inaccurate regarding the state of its AI initiatives. The company maintains that its Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs, reiterating its commitment to building “the world’s best personal assistant.”