Amazon’s efforts to monetize its Alexa-enabled devices have reportedly fallen short, with the company facing significant financial losses. According to internal documents and sources familiar with the situation, Amazon lost more than $25 billion on products like Echo and Kindle from 2017 to 2021. Despite boasting a vast customer base for these devices, it appears that many users primarily utilize Alexa for basic functions, such as setting alarms, rather than shopping.
A former senior employee expressed concerns about the outcomes of Amazon’s investment, suggesting that the company has hired extensive talent without achieving meaningful results. In response to these challenges, Amazon CEO Andy Jassy is reportedly considering the introduction of a paid version of Alexa. However, some engineers working on this project remain skeptical about its potential impact.
An Amazon representative stated that the company prioritizes the value created for customers using its services, asserting that their Devices & Services division has established multiple profitable ventures and is well-positioned for future success.
At the same time, Amazon’s advancements in artificial intelligence for Alexa, which were showcased in September, are said to be far from completion. Former employees indicated that the company lacks sufficient data and access to necessary computational resources for the sophisticated large language model needed for the upgraded assistant. Furthermore, reports suggest that Amazon has shifted its focus toward generative AI for its cloud computing services, Amazon Web Services, potentially sidelining the AI enhancements for Alexa.
In response to these claims, Amazon contested the accuracy of the former employees’ assessments, affirming that its Artificial General Intelligence team has access to essential resources, including proprietary chips and Nvidia GPUs, and maintains its commitment to developing a top-tier personal assistant.