Amazon’s efforts to monetize its Alexa-enabled devices have not been successful and have led the company to incur substantial losses, reportedly amounting to over $25 billion from 2017 to 2021, according to internal documents and sources familiar with the situation, as reported by the Wall Street Journal. Despite having hundreds of millions of customers for its devices, the utilization of Alexa-enabled Echo speakers is primarily for simple tasks like setting alarms, rather than engaging in shopping through 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 reportedly seeking solutions, including the introduction of a paid tier for the voice assistant. However, some engineers working on this paid version are skeptical about its efficacy.
An Amazon spokesperson highlighted that the company is focused on creating value for customers using its services, not just through device sales, and noted that its Devices & Services division has established several profitable ventures.
Additionally, reports suggest that Amazon’s new AI-powered version of Alexa, which was demonstrated in September, is far from completion. Former employees indicated that the company lacks sufficient data and access to necessary chips to support the advanced language model for the updated assistant. It has been reported that Amazon has shifted its focus towards generative AI development for its cloud computing division, Amazon Web Services.
In response to these claims, Amazon disputed the assertions of former employees, stating that the Amazon Artificial General Intelligence team has access to in-house Trainium chips and Nvidia GPUs, maintaining that its vision for Alexa remains geared towards creating the world’s best personal assistant.