Amazon’s efforts to monetize its Alexa-enabled devices have reportedly resulted in significant financial losses for the company, with estimates suggesting a loss exceeding $25 billion between 2017 and 2021. According to a report from the Wall Street Journal, relying on internal documents and anonymous sources, it was revealed that the company’s Echo, Kindle, and other devices have not performed as well as anticipated.
Despite Amazon having hundreds of millions of customers for its devices, the Alexa-enabled Echo speakers are primarily utilized for basic functions, such as setting alarms, rather than shopping on Amazon itself. A former senior employee expressed concerns about the company’s investment in staffing and technology for what has turned out to be a limited functionality.
In response to these challenges, Amazon’s CEO Andy Jassy is reportedly seeking solutions and is planning to introduce a paid version of the Alexa voice assistant. However, some engineers involved in this project have expressed skepticism about its potential impact.
An Amazon spokesperson emphasized the company’s focus on providing value to customers through services, rather than solely through device sales. They noted that the Devices & Services organization has created several profitable ventures and is well-positioned for future success.
Moreover, the development of a new AI-powered version of Alexa, demonstrated in September, is reportedly facing setbacks. Former employees suggest that the necessary data and hardware needed for the advanced language model are lacking, leading to a deprioritization of the Alexa AI project in favor of generative AI initiatives within Amazon Web Services.
In response to criticism, Amazon defended its current AI efforts, stating that its Artificial General Intelligence team has the required resources and remains committed to creating a top-tier personal assistant.