Amazon’s strategy to monetize its Alexa-enabled devices has reportedly not been successful, leading to substantial losses for the company. From 2017 to 2021, Amazon incurred over $25 billion in losses from its Echo, Kindle, and other devices, as revealed in a report by the Wall Street Journal, which cited internal documents and sources familiar with the situation. Although the company boasts hundreds of millions of customers using its devices, the primary functions of Alexa-enabled Echo speakers seem to involve setting alarms and accessing free applications, rather than facilitating shopping on Amazon.
A former senior Amazon employee remarked, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to these challenges, Amazon’s CEO Andy Jassy is reportedly exploring solutions, including the introduction of a paid version of its voice assistant. However, some engineers working on this initiative have expressed concerns regarding its potential effectiveness.
An Amazon spokesperson stated, “We are focused on the value we create when customers use our services, not just when they buy our devices.” The company claims that its Devices & Services organization has established several profitable ventures and is well-positioned for future success.
In addition, Amazon’s new AI-driven version of Alexa, which was demonstrated in September, is reportedly not ready, according to former employees who have raised concerns about the company’s lack of data and access to necessary chips for the large language model that underpins the new assistant. Despite this, Amazon has deprioritized the AI-enhanced Alexa project to concentrate on generative AI developments for its cloud computing sector, Amazon Web Services.
In response to criticisms, Amazon stated that its former employees are misinformed regarding its current AI efforts and assured that its Artificial General Intelligence team has access to the required in-house Trainium chips as well as Nvidia GPUs. The company’s objective for Alexa remains to create “the world’s best personal assistant.”