Amazon’s efforts to monetize its Alexa-enabled devices have been largely unsuccessful, resulting in losses exceeding $25 billion from 2017 to 2021, according to a report by the Wall Street Journal based on internal documents and interviews with anonymous sources. Despite having hundreds of millions of customers using devices like Echo and Kindle, many users primarily use the Alexa features for basic tasks such as setting alarms rather than for shopping purposes.
A former senior Amazon employee expressed concerns over the company’s hiring and investment in technology, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to these challenges, CEO Andy Jassy is reportedly considering launching a paid version of Alexa. However, some engineers fear that this new offering may not significantly change the current trajectory.
An Amazon spokesperson emphasized the company’s focus on value creation beyond just device sales, noting that the Devices & Services organization has been successful in establishing various profitable businesses.
Additionally, concerns have been raised regarding the readiness of Amazon’s new AI-powered version of Alexa. Former employees reported that the technology is lagging, lacking sufficient data and access to necessary chips for the large language model that underpins the assistant. The company has also redirected focus to develop generative AI for its cloud service, Amazon Web Services.
In rebuttal, Amazon stated that former employees are misinformed regarding its AI initiatives, asserting that the Amazon Artificial General Intelligence team has access to the required computational resources. The company reiterated its commitment to creating “the world’s best personal assistant.”