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 more than $25 billion from its Echo, Kindle, and other devices between 2017 and 2021. While the company has amassed a vast customer base for these devices, their primary functions appear to be setting alarms and using free applications rather than generating sales through Amazon.
A former senior employee expressed concerns about the direction of the company, jokingly 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 Alexa. However, some engineers involved in this project have reservations about its potential effectiveness, as mentioned by the Wall Street Journal.
An Amazon spokesperson highlighted that the company’s focus extends beyond device sales to the value created through its services. They noted that the Devices & Services organization has developed several profitable ventures and is well-prepared for future success.
Additionally, Amazon’s new AI-enhanced version of Alexa, showcased in September, is reportedly not yet ready for launch, as former employees indicate the company lacks sufficient data and the necessary chips to support the advanced technology. Furthermore, it has been suggested that Amazon is prioritizing generative AI development for its cloud computing arm, Amazon Web Services, over the advancement of its AI-driven Alexa.
In response to these claims, Amazon stated that the assertions made by former employees are incorrect and that its Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs. The company reaffirmed its commitment to developing “the world’s best personal assistant.”