Amazon’s efforts to monetize its Alexa-enabled devices have reportedly resulted in significant financial losses, with the company losing over $25 billion from its Echo, Kindle, and similar devices between 2017 and 2021. Despite having hundreds of millions of users for its devices, data suggests that customers primarily use Alexa-enabled Echo speakers for basic functions like setting alarms rather than shopping.
A former senior employee expressed concerns about the situation, suggesting that the hiring of numerous staff has not translated into effective product enhancements. In response to these challenges, Amazon CEO Andy Jassy is reportedly exploring a new paid tier for the voice assistant. However, there are concerns among engineers that this initiative may not yield significant results.
An Amazon representative emphasized that the company is focused on providing value through its services, not just through hardware sales. They noted that the Devices & Services division has successfully established several profitable ventures and is well-positioned for future growth.
Additionally, Amazon’s new AI-enhanced Alexa, which was showcased in September, is said to be far from ready, according to former employees. The company reportedly lacks sufficient data and necessary chip access to support the advanced language model for the updated virtual assistant. Furthermore, it appears Amazon has shifted its priorities towards developing generative AI for its cloud computing arm, Amazon Web Services.
In response to the criticisms, Amazon stated that the claims from former employees regarding its AI initiatives are inaccurate. The company asserted that its Amazon Artificial General Intelligence team has access to both its own chips and Nvidia GPUs, reiterating its commitment to creating a top-notch personal assistant with Alexa.