Amazon’s venture into monetizing its Alexa-enabled devices has seemingly fallen short, leading to substantial financial losses for the company. Between 2017 and 2021, Amazon reportedly incurred losses exceeding $25 billion from its Echo, Kindle, and other devices, according to internal documents and sources cited by the Wall Street Journal. Although Amazon boasts hundreds of millions of customers for its devices, it appears that the Alexa-enabled Echo speakers are primarily utilized for basic functions like setting alarms, rather than for shopping on Amazon.
A former senior employee expressed concern, 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 reportedly exploring solutions, including the introduction of a paid version of its voice assistant. However, some engineers involved in the project reportedly doubt that this change will significantly impact the situation.
An Amazon spokesperson emphasized the company’s focus on the value created for customers utilizing its services, rather than solely on device sales. They noted that the Devices & Services organization has developed various profitable businesses for Amazon and is poised to continue this trend.
In addition, Amazon’s recently showcased AI-driven Alexa, revealed in September, is reportedly far from ready, as indicated by former employees. The company is said to face challenges with data availability and access to the necessary chips for the large language model that powers the new version of its virtual assistant. Furthermore, it appears Amazon has shifted its priority towards enhancing generative AI for its cloud computing division, Amazon Web Services.
In response to claims from former employees, Amazon stated that their assessments are incorrect and lacking current insight into the Alexa AI initiatives. The company assured that its Artificial General Intelligence team has access to both its own Trainium chips and Nvidia GPUs, maintaining that the goal for Alexa remains unchanged: to develop the world’s leading personal assistant.